Soaring inflation is hitting many individuals, households and businesses hard. With the costs of living and the costs of operating a business rising, affording items when required such as vehicles, can be a major challenge. Small businesses and new enterprises can be especially impacted due to the issues some face in sourcing finance. There is a solution. Jade Car Loans offers Low Doc Car Loans to enable new and small businesses access to affordable finance to purchase the necessary business vehicles.
While purchasing new cars and other vehicles may for some buyers be a luxury or a want, for many business operators the purchase is a necessity. It may be key to the entire operation such as for deliveries, pick-ups or as essential transportation for meetings with customers and suppliers. As a key business asset, the vehicles need to be acquired with affordable finance that works with cash flow.
In order to achieve that objective, business owners first need to meet the guidelines to apply for finance. This is the point where many may not get passed the first hurdle. Many lenders have criteria for business loans which include a minimum timeframe that the business must have been operating. This can be 12 months or even 2 years. For new and newish operators, they simply cannot tick that box.
Other criteria typically include having a comprehensive range of financial documentation and records of the business trading history and financial position. Again, another box that many that have only been in business for a short time cannot tick. Placing the option of purchase cars for the operation potentially out of reach.
The solution in these instances may be Low Doc Car Loans. A specialist type of finance which is not available through all lenders, but is offered through our expert broker-style lender services.
Low Doc Car Loans: Overview
As the finance title implies, Low Doc Car Loans are a form of business finance for businesses that do not have the complete set of documentation that is required to apply for car loans through many lenders. We source finance for these applicants through a selection of our non-bank lenders that do not have the strict application criteria as some other lenders.
The basic criteria for eligibility for this type of finance application is to hold a current ABN and to have identification. Where a business can provide forms of financial documentation that can enhance the application and prospects for a better car loan offer. No Doc Car Loans are included in this category of finance application. The difference is essentially in the quantity of docs that are presented.
The type of documentation may include:- bank statements; BAS returns; income tax returns if trading has commenced and covered a financial year; profit and loss statements; and similar reports. Where a business is total start-up it would be unlikely to have very few or any of these docs. A business plan may be presented to support the application.
Documents do not necessarily need to be prepared by a finance professional such as an accountant. Business owners may prepare basic spreadsheets and reports with bank account records to validate the information.
Where a business is very small and/or new, it is typical for the financial records of the owner or director to be requested in a Low Doc Car Loan application. The owner may also be asked to provide a personal guarantee or other form of security for the car loan.
Who is eligible?
All types of business structures are welcome to enquire about a Low Doc Car Loan. This includes sole traders, ABN-only holders, family enterprises, partnerships and pty ltd companies. Being registered for GST is not an essential requirement but can be viewed as favorable. Reminder, businesses with turnover exceeding $75,000 pa must apply for GST.
If you are unsure as to the eligibility for your business, give us a quick call and discuss the situation with one of our consultants.
What types of loans are available?
The Low Doc description actually refers to the business applying for the car loan rather than a specific finance product. Where a business is approved as a low doc application, the business may have the choice of which motor vehicle finance product that they prefer. In some instances, lenders may have preferences as to which they will approve.
Business owners are strongly advised to consult with their accountant on which particular finance facility will best suit their objectives. The features and suitability to different businesses do vary across the range.
The interest rates also vary across the loan products. The rates offered also vary for individual applicants. While many may think that Low Doc and small businesses in general will always be offered high interest rates, that is not necessarily the case. We achieve affordable and cheaper interest rates on Low Docs Car Loans for many of our customers.
The strength of the application and the credit profile of the business and possibly the individual business owner will be assessed and contribute to the interest rate we can negotiate.
What tax deductions are allowed?
All forms of business finance, including Low Doc Car Loans, have tax deductible elements. When approved for this category of finance application, a business can realize the relevant tax deductions applicable to the finance product selected.
For those that acquire new vehicles before 30 June 2023 with a sole trader car loan and meet the ATO criteria, may realize the significant deductions under temporary full expensing.
Enquire Now
With the RBA indicating that more rate rises are ahead, moving as quickly as possible on new car purchases with finance is strongly advised. We welcome confidential and no-obligation enquiries to discuss how a Low Doc Car Loan may suit your business.
Contact Jade Car Loans at 1300 000 003 for Low Doc Car Loans
DISCLAIMER: IN REGARD TO MISREPRESENTATIONS AND ERRORS CONTAINED IN THE MATERIAL AS PRESENTED, LIABILITY IS NOT ACCEPTED. THE DETAILS AND CONTENT IS PROVIDED FOR CAR BUYERS AND INDIVIDUALS AND BUSINESS SEEKING FINANCE PURELY AS GENERAL INFORMATION. THIS IS NOT PROVIDED AS THE ONLY SOURCE OF FINANCIAL INFORMATION. ANYONE THAT CONSIDERS THAT NEED FINANCIAL ADVICE ABOUT THEIR SPECIFIC REQUIREMENTS SHOULD SEEK THEIR OWN FINANCIAL ADVISOR.
