Trust & Company Borrower Document Checklist

When the borrower is an individual, a lender mainly needs to understand that person’s income, commitments and the security property. When the borrower is a family trust or a company, the lender is assessing a legal entity — so it also needs to understand the entity’s governing documents, its financial position, and the individuals who stand behind it through guarantees.

This checklist is the companion to our loans for family trusts and companies service page. It sets out the entity-specific documents lenders commonly review, so you can be ready. It is general information about lender processes, not legal advice, and lender policy applies — being ready does not imply a trust or company borrower will be accepted.

Alongside the usual income and identification documents, an entity application commonly adds:

• Trust borrowers: the trust deed and any amending deeds; details of the trustee (and, for a corporate trustee, that company’s records); distribution statements.
• Company borrowers: the company constitution; a current ASIC company extract; director and shareholder details.
• Entity financials: the entity tax returns and financial statements (profit and loss, balance sheet).
• Entity banking: the entity’s bank statements for a recent period.
• Guarantor details: identification, income and existing-commitment documents for each guarantor.

The trust deed and company constitution matter because they determine whether the entity can borrow and grant security in the first place. Where those documents need to be created or amended, that is a solicitor’s role — see our business structure advice and structuring implementation pages for how the structure itself is set up.

Because an entity may hold limited assets in its own right, lenders almost always require the people behind it to provide personal guarantees. For a company that typically means the directors and often the major shareholders; for a trust it typically means the trustee, the directors of any corporate trustee, and commonly the adult beneficiaries. Each guarantor is generally assessed on their own income, commitments and credit conduct.

Guarantee obligations are significant — a guarantor can become personally liable if the entity cannot repay. For that reason, lenders generally require each guarantor to obtain independent legal advice before signing the guarantee, and that requirement is there to protect the guarantor. We coordinate the financial side of the application; the legal advice on the guarantee is provided by a solicitor.

Entity borrowing usually broadens the income documentation, because the picture spans the entity and the individuals. Lenders commonly want the entity returns and financial statements, evidence of distributions (for a trust) or salary and dividends (for a company), and the personal returns of the guaranteeing individuals — so the overall position reconciles.

The personal-income documents that sit alongside the entity documents are covered in our self-employed home loan document checklist, and the way lenders read those returns is explained in how tax returns affect a home loan. Because lenders treat trust and company structures differently, the structure can narrow the shortlist — which is why matching the application to a suitable lender matters.

Entity lending is where having the accountant who prepares the trust or company returns and the broker arranging the loan in the same practice pays off most. The financial statements, distributions and returns the lender wants already exist and are consistent with what was lodged; the deed and structure are already understood; and the application can be matched to a lender whose policy fits the structure — without re-requesting documents or reconciling differences after the fact.

That does not change the lender’s decision, which still depends on its assessment, but it makes the supporting file cleaner and the process smoother. The lending side is set out on our trust and company loans page and the entity returns on our trust tax return page — or get in touch to scope your situation.

This guide is general information only and does not take into account your objectives, financial situation or needs. It is a document checklist, not legal or credit advice. Lender policy applies and a trust or company borrower is not guaranteed acceptance; any approval depends on the lender’s assessment. Guarantors should obtain independent legal advice before signing, and trust deeds and constitutions should be prepared or reviewed by a solicitor.