Low Doc ABN Car Finance

Low Doc ABN Car Finance provides ABN holders with a convenient and accessible financing option to purchase vehicles for business use. Businesses often need vehicles to do their work efficiently. From delivering goods, meeting clients, or carrying all necessary tools and equipment to job sites. Having reliable transportation is crucial for success.

Sometimes, getting a loan for a vehicle can be tricky, especially for businesses with an ABN. That is where low doc car loans come in. Low doc essentially means low documentation. These loans are designed to make it easier for businesses to purchase the vehicles they need without the need for extensive paperwork. In this article, we will explore what low doc car loans are, who can get them and what documentation is required. Finally, we show you how to find the right low doc car loan for your business.

What is Low Doc ABN Car Finance?

Low doc ABN car finance is a type of car loan option designed for self-employed individuals or businesses who may have difficulty providing the extensive financial documentation typically required for traditional car loans. These loans are particularly suitable for sole traders and small business owners with irregular income streams who may not have the standard documentation, such as pay stubs or tax returns.

Who Can Get Low Doc ABN Car Finance?

To qualify for a low doc car loan, applicants must hold an Australian Business Number (ABN). Your business structure can be a self-employed sole trader, partnership, company, or trust.  Each lender has different requirements as to how long your ABN has been running and whether it is GST registered.

The second requirement is that the vehicle being purchased must be used predominantly for business use.  The ATO defines ‘predominately’ as greater than 50%. Business use is defined as using the vehicle to generate income. For example, a delivery driver uses the vehicle as part of day-to-day operations to make money. A trades person uses a Ute to transport tools required to enable them to work. However, a hairdresser using a car to drive to and from their salon is not using the vehicle to generate income. If the hairdresser was a mobile hairdresser than the vehicle could be claimed as business

What Documents are Required?

Low doc car loans, while requiring less documentation compared to traditional loans, still necessitate some proof of income to assess the borrower's ability to repay the loan. Typically, lenders offering low doc car loans may accept alternative forms of income verification, which may include:

  1. Accountant's Letter: A letter from a qualified accountant confirming the borrower's income. This letter typically outlines the borrower's income sources, business structure, and financial stability. It serves as a declaration of the borrower's financial situation.
  2. Business Activity Statements (BAS): BAS documents provide a summary of a business's transactions. Lenders may accept BAS documents as proof of income, as they reflect the business's revenue and cash flow over a specified period.
  3. Bank Statements: Bank statements show the inflow and outflow of funds in the borrower's bank account(s). Lenders may request bank statements covering a specific period to verify the borrower's income and assess their financial stability. Bank statements can provide insights into the borrower's income sources, frequency of deposits, and overall financial behavior.

Essential Documentation Requirements

In addition to proof of income there are other essential documentation requirements common to all loans. These include:

  1. Identification. Lenders need to confirm who you are and where you live. Hence you will need to provide a copy of your driver’s licence and Medicare card. Your driver’s licence must have up-to-date address details.
  2. Privacy Form. You will need to sign a privacy form when applying for a loan. This authorises the lender to collect, use, and disclose your personal information for the purpose of assessing your loan application and managing your loan account. Your personal information is handled appropriately and in accordance with privacy laws.
  3. Invoice. By reviewing the car invoice, the lender can confirm important details about the vehicle purchase, assess its value, and ensure that the loan amount aligns with the purchase price. This helps the lender make an informed decision about approving the loan and finalizing the financing arrangement. A Vehicle Identification Number (VIN) is a unique code assigned to each vehicle and is included on the invoice. This helps the lender verify the identity of the vehicle and conduct necessary checks, such as a vehicle history report.

What are the Advantages for ABN holders

  1. Flexibility in Income Documentation: Low doc car loans offer ABN holders flexibility in documenting their income. Instead of requiring extensive paperwork like traditional loans, these loans may accept alternative forms of income verification such as self-declarations, business activity statements (BAS), or bank statements.
  2. Tailored Loan Options for Varied Business Needs: Low doc car loans can meet the diverse needs of businesses with ABNs. They offer customized loan options, allowing ABN holders to choose repayment terms, loan amounts, and features that best suit their specific business requirements. For examples, by including a balloon payment in your loan structure you can reduce the loan repayments. The ‘balloon’ lump sum payment is due at the end of the loan term. Often business owners will sell the car and payout the balloon with the proceeds. They then upgrade their business vehicle to suit the growing needs of their business.
  3. Faster Processing Times: Compared to traditional loans, low doc car loans typically have faster processing times. With fewer documentation requirements, the approval process is streamlined. This enables ABN holders to access the funds they need more quickly.
  4. Tax Deductions and Benefits: ABN holders may be eligible for tax deductions and benefits associated with low doc car loans. Depending on their business structure and circumstances, they may be able to claim deductions for interest payments and/or depreciation on the vehicle, potentially reducing their overall tax liability.

How to Find the Best Low Doc ABN Car Finance for Your Business?

Finding the right low doc car loan for your business is essential. And the best way is to leverage the expertise of an experienced finance broker who has access to numerous lenders.  

The AAA Finance Team are both qualified and highly experienced. The team has access to a panel of over 40 lenders. We listen to your needs and tailor a finance solution to suit your individual circumstances. Our job is to match you with the lender who has the most competitive interest rate and best loan terms that suit your business. AAA Finance will save you time and money!

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