A Guide to Low Doc Business Loans
What are low doc business loans?
Low doc business loans allow business owners to purchase assets for use in their business without the need for extensive paperwork. Low doc essentially means low documentation. In other words, by-pass the red tape and vast amounts of financial paperwork. If you have not completed your latest tax return – no problem! An up-to-date tax return is not required.
What can I purchase with low doc business loans?
All types of vehicles, plant and equipment can be purchased using a low doc business loans. Basically, anything with a serial number can be financed and used as security. If the asset is for business use, then the loan is a business loan.
Equipment finance for excavators, tractors, forklifts, bull dozers, diggers, front end loaders i.e. landscape equipment, mining equipment and earth moving machinery.
Truck finance for small to medium trucks up to the prime movers. Plus, any trailering equipment that goes behind a truck.
Office equipment including computers, screens, and POS (payment systems).
Industrial machinery such as a lathe for a large workshop.
Cars, utes, vans. Using your car to get to and from work is not considered an income generating activity. The car must be used for work related purposes. For example, a tradesman driving to a work site with the work vehicle containing tools and equipment for the day’s work. A delivery driver or uber driver also use their car to generate income.
Campers and caravans. We have financed several camper trailers for those working in remote locations who need on site accommodation, such as a fencing contractor or station hand. Also suitable for trades persons who are working in weather affected areas where accommodation is limited i.e. flooding, cyclone, fire.
Motorbikes. Logoed and used for promotional purposes or used as a quick and easy way to get to a work site when driving machinery all day.
How do I qualify for low doc business loans?
The business must have an ABN. The structure can range from a sole trader, trust, or company. The business must be currently operating and have revenue passing through the books. The majority of lenders want you to have an ABN running for a minimum of 1 to 2 years. Most lenders also want the business to be GST registered. Being GST registered gives lenders an idea of the minimum amount of revenue/turnover that is passing through your books. To be GST registered you must have a turnover of over $75,000 per annum.
However, we do have some lenders that will look at a 1-day old ABN depending on the circumstances. For example, a recent client of ours had just finished his plumbing apprenticeship. He is going to keep working for his boss but now he will be using a brand-new ABN to sub-contract himself back to his old employer. A low doc business car loan helped him purchase a work ute using his new ABN.
2. Asset to be used ‘predominately’ for business related use
The asset being purchased must be used to generate income in your business for at least 50% of the time.
3. Provide requested low documentation and sign declaration
Every lender differs in their documentation requirements. It is dependent on the type and age of asset being purchased as well as your profile and credit history. Documentation may include business activity statement, profit and loss statement, last year’s tax return, bank statements or accountant’s letter. These documents are to prove that revenue is passing through the business. We even have a couple of lenders who will offer Business loans without any documentation to strong asset backed applicants, however you will need to sign a declaration stating that you can afford the loan repayments.
4. Get pre-approved low doc business loans
Having your funds pre-approved is the best way to ensure you are growing your business within your budget. Knowing that the monthly repayments are fixed for the term of the loan allows you to manage cash flow. Want to find out more? Call and speak with a AAA Finance business finance expert on 07 5493 1222.
The AAA Finance business loan calculator can assist you with budgeting and future cash flow. Simply input the finance amount, term of loan in years and an approximate interest rate. The interest rate will depend on the type and age of asset as well as your profile. The easy-to-use tool calculates a monthly repayment and includes a handy balloon payment option.
Benefits of low doc business loans
- Low documentation required. No current tax return – no worries!
- Lower interest rates than consumer loans.
- If you are GST registered, you can claim the GST back on the purchase price of the asset. Note that you can only claim up to the luxury car tax limit.
- Claim back the interest you pay on the loan via tax. Please speak with your accountant.
- Depreciate the asset through your books. The ATO Instant Asset Write-off is still available for business to access. Again, your accountant will be able to advise you.
Benefits of using AAA Finance
- Extensive finance experience. We know what we are doing, and we do it very well.
- Competitive low interest rates. With over 30 different business finance lenders means we will get you the lowest interest rate and best loan terms to suit you.
- Quick loan approvals. Most loans approved with 24 hours.
- Easy loan application. Over the phone takes approximately 5 minutes or complete at home.
- AAA Customer Service. Friendly finance experts that take the time to get to know you and your business and we will be there to assist your business grow into the future.
Contact AAA Finance today!
About the author
Peter Watman has extensive finance and automotive experience having worked in both industries for over 30 years. Peter founded AAA Finance and Insurance in 2012. He leads an experienced team that provides quick and easy finance solutions along with exceptional customer service.