Accounting bodies have recently reported a spike in banks asking accountants to sign off on a client's loan application by way of a Capacity to Repay Certificate – that is, asking accountants to sign off, by declaration, on the future viability of a business, and in effect sign off on their client's capacity to repay a loan or even what percentage they will use a motor vehicle for business purposes in the future.
This is a practice that was first seen 10 years ago and banned by APRA and ASIC but now seems to be appearing again.
Whilst we understand the critical role that the preparation and provision of quality financial information for small businesses plays in loan applications, it is the lender's responsibility to use that and other information to make an appropriate credit assessment. We will always work with our clients to provide whatever supporting information is requested and required as part of an application, however we are unable to sign Capacity to Repay Certificates for banks, as we do not hold an Australian Credit Licence.
As banks continue to be under scrutiny for various practices and procedures, and with the flow-on effect being felt by borrowers, we recommend you contact Andrew Forsyth from Perrier Ryan Financial Services when next considering a loan or re-financing application. He will work closely with you to ensure that you are well prepared for that process and armed with all that's required to stand you in good stead for your application's assessment by the bank or financial institution.
Andrew can be contacted in the office on 07 3391 7566, by email on andrewf@perrierryan.com.au , or mobile on 0439 827 700.
If you have any other questions in relation to this, please call Paul or Dan on 3391 7566.
