The Accountant Certificate Stalement in Private Credit: And a Practical Way Around It

Across Australia, major accounting bodies, including CPA Australia and CA ANZ, have publicly warned accountants against signing “capacity to repay” and serviceability declarations for loan applications.

Their concern is understandable.

Accountants do not want to assume responsibility for a lender’s credit decision, particularly where future cash flow projections or repayment capacity are involved. The joint guidance from the professional bodies warns about legal liability, professional indemnity insurance concerns, and the risk of lenders shifting credit assessment responsibility onto accountants.

As a result, many accountants are now reluctant to sign the types of declarations that were once commonly used across the private lending sector.

This has created a growing stalemate.

The lender wants comfort around servicing.
The accountant does not want to provide forward-looking repayment guarantees.
The borrower gets caught in the middle.

The reality is that genuine businesspeople require private credit from time to time.

Property developers, business owners and experienced operators often have “lumpy” cash flow that does not fit neatly inside traditional bank servicing models. A developer may own substantial assets and have a clear exit strategy, yet still fail a conventional monthly servicing test during a construction or repositioning phase.

That does not necessarily make the transaction bad credit.

It simply means the deal requires a more commercial and flexible approach.

At Arc Money, we structure facilities around the realities of short-term private lending and the borrower’s identified exit strategy.

One of the ways we do this is through prepaid loan terms.

For example, a borrower may require a 12-month bridging or working capital facility. Rather than relying on monthly servicing capacity, the interest can be prepaid upfront as part of the loan structure. This means there are no monthly repayment obligations during the loan term. In most circumstances, Arc Money won't require an Accountant Certificate when the facility is prepaid for the term. 

The assessment then shifts from:
“Can the borrower meet monthly repayments from income?”

To:
“Is there a credible and measurable exit strategy to repay the facility?”

That exit strategy may include:

• Sale of a property
• Refinance on completion of works
• Pending settlement proceeds
• Incoming capital event
• Asset repositioning
• Agreed liquidity event

Importantly, if the borrower repays the loan early, Arc Money refunds the unused prepaid interest for the remaining loan term.

For example:

• 12 months prepaid
• Loan repaid after 6 months
• Unused 6 months of prepaid interest refunded

This structure creates flexibility for borrowers while avoiding unnecessary pressure on accountants to provide opinions outside their preferred scope of engagement.

The accountant certificate was once a useful tool within the private lending ecosystem. However, the regulatory and professional landscape continues to evolve.

That is why it is increasingly important to work with a private lender that understands how to operate within an ever-changing regulatory environment and can structure transactions accordingly.

Private lending should be commercially realistic, flexible and solutions-focused.

At Arc Money, we assess each transaction on its merits and structure facilities to align with the borrower’s scenario, security position and exit strategy.