Taxable income is the starting point, not the answer
Your accountant works to minimise taxable income. A lender works from taxable income. Those two objectives pull in opposite directions, and the gap between them is where most self employed applications are won or lost.
The bridge is add-backs: legitimate expenses in the financials that do not represent an ongoing cash cost to the business.
Common add-backs
Depreciation, interest on debts being refinanced, one-off or non-recurring expenses, superannuation contributions above the compulsory rate, and in some cases motor vehicle or home office adjustments.
Not every lender accepts every add-back. Choosing a lender whose policy matches your financial structure is usually worth more than a rate discount.
Company and trust structures
If you operate through a company, profit retained in the business is not personal income by default — but many lenders will include your share of net profit after tax where you control the entity.
Trust distributions to a spouse or family member are treated differently again. Some lenders count them fully, some discount them, some disregard them entirely. Getting this assessment right before lodging is the difference between an approval and a decline.
Preparation that pays for itself
Two years of consistent, lodged financials remain the strongest position. Where the most recent year is materially stronger, some lenders will assess on the latest year alone with an accountant's letter.
Keep business and personal accounts separate, lodge on time, and speak to us before your accountant finalises the year if borrowing is on the horizon. A conversation in May is worth far more than one in October.