Aaron WhybrowGeneral Manager, Strategic Mortgage Broker

Accounting or actual loss on business tax returns

Name: Accounting or actual loss on business tax returns
Uploaded: 2019-04-17T01:20:14Z
Duration: 1 min 39 s
Channel: Aaron Whybrow
Description: Short advisory YouTube monologue (April 2019) by Aaron Whybrow of Diagnostics and Finance explaining how banks typically assess business tax-return…

17 Apr 2019 · 2 min

Watch on YouTube

1:39

Short advisory YouTube monologue (April 2019) by Aaron Whybrow of Diagnostics and Finance explaining how banks typically assess business tax-return losses when considering lending. Main points: lenders usually review the profit & loss on tax returns and may allow add-backs (e.g., continuing wage payments to the owner, interest, depreciation) which can reduce the apparent loss; small losses or minor year-to-year variances are often manageable, while large losses may require preparation and explanation. The speaker also references related guidance about alternative documents ("lodoc/Altdoc").

Questions this video answers

Aaron Whybrow (Aaron) from Diagnostics and Finance.

April 2019.

YouTube video.

Can a bank still lend to you when you have a loss on your company tax returns? Hey, it's Aaron from Diagnostics and Finance. This time of year a lot of people either finish off their 2018 tax returns or they've got them back. And sometimes with some accounting practices you might have some expenses that were drawn forward or pushed backwards that has changed your numbers to where you think they're going to be. So how does a bank look at that? Some banks are different, some banks are better than others but. But typically most of them will look at your profit and loss. So if you've got income coming in and then you've got a loss at the end, there's a multitude of expenses and as a home loan application will allow a few add backs in there, if you continue to pay a wage, obviously that's your money that goes to you. If you've got interest and depreciation and a few other things sitting in your tax return, we can add those back too. So don't be frightened. Too much of a loss on your tax return. Obviously a big one can be a bit disastrous and a bit of preparation come in place. A little one may not be too damaging for you. Or if you've got a few dollars profit or a big variance between 2017 tax returns and 2018. Just remember we are in April 2019 right now. So there is some other explanation documents that can come into the picture if everything works on your 2018 tax. If you don't have your tax returns up and going. There's another video I'm going to make called Is lodoc or Altdoc good for you or bad for you? So stay tuned. Alright, It's Aaron from Diagnostic Finance. Have fun.