What are add backs and how do lenders treat them?
Add backs are expenses put back into your net profit so a lender can see what the business really earns. Depreciation, one off costs, interest on debt being refinanced and above market owner wages are the usual ones. Most lenders will accept them where the paperwork backs them up. What they won’t accept is a spreadsheet of adjustments with nothing behind it. The stronger your evidence, the more of the add back a credit team will usually allow.
Which add backs lenders usually accept
The ones that get through are the ones you can prove. Depreciation and amortisation are non cash, so they come back in almost every time. Interest on facilities that are being repaid or refinanced usually does too. So do genuine one off costs like a legal settlement or a relocation. Owner wages above what a manager would be paid for the same job count too. Private motor vehicle running costs and personal travel run through the business are often accepted where the accountant has flagged them in the notes.
How lenders test the add backs
A credit assessor starts with the tax return and the financials, then looks for the trail. Anything you claim needs to show up somewhere.
- Signed accountant letter setting out each adjustment and the reason for it
- Ledger detail or invoices behind the one off costs
- Consistency across the financial years a lender asks for
Add backs matter most in acquisition finance, where the price is set off adjusted earnings. Lenders tend to be more conservative than the adjusted figure in a sale memorandum. Your accountant is the right person to confirm how yours are treated.
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Last updated 15th July 2026. Reviewed by Authorised Credit Representative 554584 of Australian Credit Licence 414426.