Why do banks in Australia want to see your ATO integrated client account summary when you apply for business lending or if you are self employed and applying for a consumer loan.
When you apply for a business loan, the lender will often ask you to provide a range of financial documents to verify your business’s financial health. One such document that Australian banks are increasingly asking for is your ATO Integrated Client Account (ICA). In this blog post, we’ll explore why banks in Australia want to see your ATO ICA when you apply for business lending.
First, let’s define what an ATO ICA is. The ATO ICA is a summary of your business’s tax obligations, including any outstanding debts owed to the ATO. It provides a detailed breakdown of your income tax, activity statement obligations, and any other tax liabilities or credits. The ICA also includes payment and refund details for each financial year, so it is a comprehensive snapshot of your tax history.
So why do banks want to see your ATO ICA when you apply for business lending? The answer is simple: it helps them assess your business’s financial health and ability to repay the loan. By looking at your ICA, the bank can get a clear picture of your business’s income, expenses, and tax liabilities. This information helps them determine whether your business is a viable candidate for a loan and what level of risk is involved.
One of the key advantages of the ATO ICA is that it provides a reliable and up-to-date source of financial information that is difficult to manipulate. Unlike other financial documents, such as profit and loss statements, which can be manipulated by business owners to present a more favourable picture of their financial health, the ICA provides an accurate record of your business’s tax history. This gives banks a higher level of confidence in your financial information and helps them make more informed lending decisions.
Another advantage of the ATO ICA is that it provides a complete picture of your tax obligations, including any outstanding debts owed to the ATO. Banks want to ensure that you are up-to-date with your tax obligations before lending you money, as unpaid taxes can significantly impact your business’s financial health. By reviewing your ICA, banks can ensure that you are current with your tax payments and have no outstanding debts that could pose a risk to the repayment of the loan.
The ATO ICA is becoming an increasingly important document for Australian banks when assessing business lending applications. It provides a reliable and up-to-date source of financial information that helps banks assess the financial health of your business and its ability to repay the loan. By providing your ICA, you can increase your chances of securing a business loan and demonstrate to the bank that you are a responsible and financially sound borrower
Attached is an example of the 12 month integrated client account statement.
By Carly Pitt