One year of financials can be enough for some pathways, two years still matter for many others. The useful question isn’t “do I have one year or two?” It’s which assessment method the specific lender uses, whether your business has traded long enough for that method, and what current evidence supports the figure.
The assessment methods, side by side
| Method | What it means |
|---|---|
| Most recent year / one-year | Some policies/products can use the latest financial year in eligible circumstances, subject to minimum business history, LVR, profession and satisfactory current trading. |
| Two-year average | Some policies average two years to smooth business volatility. |
| Lower/latest year | Where performance has declined, many policies become more conservative and use the lower or latest figure rather than an average. |
| Latest year with growth cap | Some policies permit the latest year, but only up to a cap relative to the prior year. |
| Current-trading validation | BAS, bank statements, management accounts or accountant evidence can be requested where annual financials are dated, growth is material, or a shorter-doc pathway is used. |
Why this matters more than the raw year count
Two businesses can both have exactly two years of financials and still be assessed very differently, one growing steadily might have its latest year used in full under one lender’s method, while a volatile or declining business might be assessed on an average or the lower figure regardless of how many years of history exists. The method the lender applies matters as much as the number of years you can produce.
What to prepare
- Financial statements/tax returns for however many years you have
- Current BAS or recent bank statements as sustainability evidence
- Notice(s) of Assessment
- A brief accountant summary if your results moved materially between years
Next step: see the full growth/decline worked examples in the Self-Employed guide and the Scenario Lens‘s Self-employed tab, then talk with KartikKumar about which method is likely to apply to your business.