Your ability to grow your business isn't limited, so why should your options for business loans? At AAA Finance we are committed to ensuring that - no matter what you need – we are the finance provider that will help you get it. AAA Finance can provide you a solution for any vehicle or equipment your business may require.
Business loans allow all types of businesses to secure a loan against all types of assets. The asset could be a car, motorbike, camper, truck, plant or equipment. The asset will need to be used predominantly for business to access a business loan facility.
- How to qualify for a business loan
- Types of business loans
- No doc business loans
- Low doc business loans
- Full doc business loans
- Advantages of a business loan
- Apply for a business loan
- Business loan calculator
- Business Loan FAQs
- Insurance options
How to qualify for a Business Loan
- Businesses can range from sole traders, partnerships and trusts to large corporations, however, they must have an ABN.
- The asset, being a car, truck, plant or equipment, must be used for a minimum of 50% business related use.
- Documentation requirements vary between the different types of business loans. For example, a low doc business loan may only require 3 months recent bank statements however a full doc business loan may require full up-to-date tax returns and banks statements.
Types of Business Loans
All business loans are a type of chattel mortgage. Chattel mortgages are very much like a secured car loan however they are only for business use. A chattel is an asset, for example, car, truck, excavator. A mortgage is the lending of funds to purchase an asset that is then used as security against the loan. Once the loan contract is complete the business owns the asset outright. Using the asset as security for the loan reduces the risk to the lender. This means lenders are willing to offer more competitive interest rates.
There a 3 Types of Business Loans
- No doc business loans.
- Low doc business loans.
- Full doc business loans.
1. No Doc Business Loans
Many small business owners don’t complete their tax return immediately at the end of the financial year. This makes sense, particularly if your business will owe tax to the Australian Government. Business owners are better off utilising those funds in their business until the tax is due.
A no doc business loan allow businesses to obtain finance without the need for up-to-date financials or any other paperwork for that matter. However, the business will need to declare to the lender an estimate of net income and gross turnover. A no doc business loan is for established businesses that have been operating for over 2 years, are GST registered and of which the director/s are homeowners.
2. Low Doc Business Loans
A low doc business loan is very similar to a no doc business loan, however, in this case the lender does want some type of proof of income. Although the lender may not require a recent full tax return, they could request 3 months bank statements to show that the business is generating sales. Other documentation that a lender may request could include the latest BAS, a profit and loss statement or a letter from your accountant. Every lender has different requirements, and every business has their own unique financial situation. This is where you need an experienced business finance broker to look after your interests – not the banks! To qualify for a low doc business loan, you will need to have an ABN running for a least 12 months and be GST registered.
3. Full Doc Business Loans
As the name suggests, full documentation is required to prove your income. Documentation for full doc business loans usually includes a copy of the current business tax return and notice of assessment. Lenders may also request 3 months bank statements, BAS, profit and loss and/or a letter from your accountant.
Advantages of Business Loans
- You own the truck, plant or equipment from the start of the agreement.
- GST registered customers can claim back the GST on the purchase price.
- Low establishment fee and monthly repayments with no payout penalties.
- Fixed interest rate for the term of the agreement.
- Monthly repayments fixed for the term.
- No GST charged on the monthly repayment.
- Access to further tax benefits where the truck, plant or equipment is used to generate income. (check with your accountant)
- Terms from 1 to 7 years.
- Balloon payments are available.
- Business loans from $5000.
Apply for a Business Loan
Speaking with an experienced business finance broker is the first step in securing finance for your business. Our business finance experts are ready to discuss your business loan requirements. We will get to know you and your business and get you the best deal in town.
Business Loan Calculator
Our easy to use Business Loan Calculator includes a balloon pay out option. You can calculate both fortnightly and monthly repayments. The calculator requires an estimate of loan amount, annual interest rate and loan term in years. The interest rate that we can organise for you depends on your profile, previous credit history as well as the type and age of asset being purchased.
Business Loan FAQs
1. Have a business ABN and preferably be GST registered.
2. The Vehicle/ equipment must be used for predominantly business-related use.
3. Financial documentation ranging from full tax return to interim financials to a simple declaration of income. Every lender has different requirements, and each business has a unique financial situation. No doc business loans do not require any documentation whereas a low doc business loan requires interim financials such as BAS, bank statement or accountant's letter.
4. Provide proof of identification and residence.
Business loans use the asset as security for the loan. You can borrow up to the value of the vehicle or equipment your business is purchasing.
A business loan in is a type of chattel mortgage. The chattel is the asset your business is buying, and the mortgage is the lender using the asset as security for the loan. Monthly fixed repayments for the term of the loan are required.
Choosing an experienced finance brokerage with a large range of lenders will ensure that you will have the best chance of a business loan approval.
AAA Finance and Insurance has a range of insurance products to protect your asset and your business loan. To protect your asset we offer Comprehensive Insurance, Tyre and Rim Insurance and Extended Warranties. Gap or Shortfall Insurance and Loan Protection Insurance are options that protect your business loan and your credit rating.
Useful Link | ATO Record Keeping for Heavy Vehicles
The link takes you to The Australian Taxation Office website