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Cash basis is a valid method
The cash basis records income and costs when money actually moves, rather than when invoiced (accruals). Many small companies and sole traders use it legitimately. A lender assessing affordability can work with either — and often leans on bank statements, which show real cash flow directly.
What to be aware of
Cash-basis accounts show timing differently from accruals, so a lender reads them accordingly. Consistency and clean bookkeeping matter more than the method. See audit questions too.
Applying
Provide your accounts and statements, whichever basis, and apply online.
Frequently asked questions
Does cash-basis accounting affect my loan chances?
No. It is a valid method for smaller businesses. Lenders can assess either basis and often rely on bank data, which shows real cash flow regardless of method.
Should I switch to accruals before applying?
Not for the loan's sake. Consistency and clean records matter more than the method. A lender reads your figures and bank flows either way.
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