Can I use my BAS to prove income for a home loan?

If your tax returns are not ready, or do not reflect your real cash flow once the business is humming, business activity statements can be a useful alternative way to evidence income. Some lenders build low documentation loans around exactly this. Here is how that works and what to weigh up.

What a BAS backed loan is

A business activity statement, or BAS, is the regular statement many businesses lodge for GST and related obligations. Some lenders offer low documentation loans that accept a recent period of BAS lodgements as evidence of business turnover and income, instead of requiring full personal and business tax returns.

Who it suits

This can suit self employed borrowers whose tax returns are not yet lodged, whose most recent returns understate current trading, or whose business has grown since the last return. Because the BAS reflects recent activity, it can present a more current picture of the business than older returns.

It is a low doc product

Using BAS rather than full returns generally falls under low documentation lending, which carries its own features. Lenders offering it typically require a larger deposit, meaning a lower loan to value ratio, and may charge a higher interest rate to reflect the reduced documentation. The exact settings vary by lender.

Mainly non bank and specialist lenders

BAS backed and other alternative documentation loans are offered mainly by non bank and specialist lenders, though some mainstream lenders have options. The suitable lenders are not always the household names, and their policies differ, which is part of why guidance helps here.

Lenders still verify the income

A low doc loan is not a no questions asked loan. Responsible lending obligations still apply, so the lender must be satisfied you can afford the repayments. They are simply verifying the income through different documents, and they may ask for additional support such as bank statements or an accountant declaration.

Full doc may be better if available

If your full tax returns are available and present your income well, a standard full documentation loan often gives a better rate and a lower deposit requirement than a BAS backed low doc loan. So it is worth checking the full doc path first, with BAS as the alternative when that path is not open.

Check what is available for you

Because availability and conditions vary so much between lenders and can change, the useful step is to find the lenders whose current policy fits your situation. A broker who works with self employed borrowers can identify suitable BAS backed options, usually at no cost to you. This is general information, not advice, and your accountant should confirm how your income is presented.