Many Australians have taken the experiences of the past two years of the pandemic to make major life and work changes. A key change for many has been in the way they earn their living. We're not talking just the move to work from home but the move to work for themselves. Some have seen the change as a necessity after possibly losing their jobs while others see it as a chance for a new chapter. Many are setting up new businesses in 2022 which require some form of vehicle. New businesses often do not meet the finance guidelines of major banks and will require low docs car loans.
While not available through all lenders, Jade Car Loans does offer Low Docs and No Docs Car Loans to assist operators setting up their new business to achieve cheap and workable motor vehicle finance. If you’ve already been rejected for vehicle finance by a lender on the basis of being a new business or you are seeking finance to purchase a car for your new business, we outline what is involved in source the loan.
Low Docs Car Loan Criteria
The terms ‘low docs’ and ‘no docs’ are often interchangeable in referring to this type of car loan. It is not actually a type of loan but actually a description of the applicant. The business applying for the loan has very little (low) or none (no) of the financial records and documents (docs) that are required for standard business vehicle finance application form.
These docs can include:- BAS statements, business annual accounts, business tax returns, bank statements, assets and liabilities statements, profit and loss statements and trading figures. Most of these financial records are accrued over the time a business has been operating. If a business is in the initial stages of operating or preparing to open, they would not have accrued those records.
In addition to the docs, there are lenders that will have minimum trading periods as an eligibility criteria for business finance. This can be as short as one year or in some cases 2 years. This would leave many new businesses ineligible for finance from those lenders.
Low Doc Car Loans and No Docs Car Loans are provided through select lenders, primarily non-bank lenders, to cater for the specific needs of new businesses. The difference between ‘no’ and ‘low’ is the quantity of docs supplied as part of the application. But ‘no docs’ still has basic criteria to be met.
- Businesses must be in possession of a current ABN.
- As with all bank and finance documents and applications, identification is essential.
- GST registration is not an essential criteria for most lenders but can often be considered as a positive for the application. If a new business has not yet registered for GST and anticipates a turnover over $75,000 each year, under Australian tax laws, they must register. This can be done via the online resources through the ATO.
Many new businesses are small and often are self-employed individuals, owner-operators and have one or two owners/directors. It is quite common for lenders to consider the financial position and the credit profile of the business owner(s) when assessing low docs car loan applications.
Business owners may enhance their application by ensuring their own personal credit profile and score is in a good position prior to applying for business finance. Reducing personal debt including credit card balances is a popular way to improve a personal balance sheet.
A personal guarantee from the business owner(s) may be requested by a lender. This may take the form of property or other assets or a personal commitment.
Loan Sources
As a specialist motor vehicle lender, Jade Car Loans has access to many different types of lenders including those that offer Low Docs Car Loans. Our consultants will be handling the finance process on your behalf and will guide you through what information and documents will enhance your application.
Our consultants negotiate the interest rate and loan conditions with our lenders to source the cheapest low docs car loan offer. While some new business owners may think they will instantly only be offered a high interest rate loan, that is not a given. Jade can secure cheap interest rate low doc car loans for many new business operators.
All applications are assessed on an individual basis and some attract specific conditions for the finance. These may include additional security being required or a cap on the total amount of the loan. Contacting us prior to purchase to arrange pre-approved vehicle finance can assist new businesses. It allows the business owner to know exactly how much they are approved to borrow and therefore what priced vehicle they can consider purchasing.
Low Docs Finance Products
As we indicated, low docs or no doc loans is the category of the business applying for the finance not an actual finance product. Low doc applicants can have the choice of the same portfolio of business motor vehicle finance as do fully documented finance applicants.
- Low Doc Vehicle Chattel Mortgage
- Low Doc Vehicle Lease
- Low Doc Commercial Hire Purchase
Discussing with an accountant or financial advisor which type of loan will best suit a particular new business is strongly encouraged as the tax benefits and other features relate primarily to accounting practices and methods.
Applying for Low Doc Motor Vehicle Finance
If you’re setting up as a courier owner-driver or just need a vehicle for use in your new business, applying for ABN car finance is a straightforward process with Jade Car Loans. Initial discussions can be done over the phone, or applications can be made online.
So if 2022 is a new start for the way you derive your income, Jade Car Loans is ready to support you with low doc vehicle finance.
Contact Jade Car Loans 1300 000 003 to discuss low doc motor vehicle finance for your new business
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.
