Add-backs
Add-backs are expenses a lender may add back to a business's taxable profit when assessing a self-employed borrower's income, such as depreciation, accepted one-off costs and interest on debts being refinanced.
Add-backs, explained.
The common add-backs are depreciation and amortisation, interest on loans that will be repaid by the new loan, one-off or non-recurring expenses, excess superannuation contributions above the compulsory rate, and salary paid to a spouse who is also an applicant.
Lenders differ on what they accept and in what proportion. Retained profit in a company is treated differently again, and some lenders will count it only where the applicant controls the company.
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The Learn section is general information about lending in Australia. It does not take account of your objectives, financial situation or needs, is not credit assistance, and is not tax, legal or financial advice. Lender policies, government schedules and regulations change; check the current position with the relevant body or with us before relying on it.
