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No Doc Business Loans | Commercial Finance Australia
The financial services industry uses the term ‘no doc’ or ‘no docs’ to describe loan applications which do not contain all the documentation required for standard loans. By documentation, the industry means financial records and other related information. No docs might mean that the enterprise has none of the usually required information or it may only have some. Despite the ‘no doc’ title, to be offered this type of loan there are some essential requirements.
This loan is considered in a high risk category and as such includes a higher interest rate than a comparable application with full documentation and usually includes additional conditions which may vary from lender to lender.
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No Doc Loans
No Docs Commercial Loans may be sought for a range of asset acquisitions including motor vehicles to be used, trucks and a wide range of equipment.
An enterprise may find itself in a situation to require a no docs loan for a number of reasons, here’s just a few:-
- Newly started commercial enterprise or just starting. With many people choosing or needing to move from employee to self-employed, to become a contractor to be in a position to seek work in their chosen field or individuals wanting a side venture as an additional source of income, there are many new emerging.
- Tradespeople very often move into their own enterprises and require loans to purchase the necessary vehicle and equipment to carry out the work.
- Documents may have been lost or destroyed for example in a fire and copies not accessible.
Not many major banks readily offer no docs loans but fortunately there are non-bank lenders that are active in this space and we have connections with these lenders. We also have connections with brokers who cater for commercial services that are seeking no docs loans. Using the services of a professional to assist you can be highly beneficial and worth considering.
No Doc Loan
Conditions and Requirements
While it is a given that you will not have the full documentation that is usually required, there is still some essential requirements:-
- ABN-holder is essential. Your venture must have a current ABN.
- Advise the GST status of your venture – if you are registered or not registered for GST
- Enterprises that are registered for GST are usually viewed more favorably than those that are not. GST registered will also have BAS statements.
- ID proof. As is required with all financial matters, you will need to provide complete proof of your identity.
- Financial records are not required but if you do have some financials, this may enhance your application.
Individual lenders may apply their own set of conditions to no docs loans, which may include:-
- A larger deposit be paid on the goods.
- Some form of loan security in addition to the goods being purchased. This may include property or other commercial assets or personal guarantee by the owner.
No Doc Loan Types
No Doc Loans for enterprises apply across the full range of commercial loan facilities:-
For full details on each lending option, please refer to our web pages.
While the loan type that is best suited to your venture depends on aspects of your structure and treatment of tax and GST, some lenders may have a preference for one or the other when approving no docs loans.
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Securing a No Docs Commercial Loan
We have connections with many lenders and many brokers that may be in a position to assist with a no docs loan for a car, commercial vehicle, truck or the equipment your require to get your organisation happening.
Just send us your details and requirements and we’ll provide you with the contacts that may be able to make it all happen.
Connect with us for possible solutions for a no docs commercial loan.
No Doc Commercial Financing
The difference between No and Low in reference to this type of loan is in regard to the amount of documents provided by the applicant. Low refers to less than the total amount and No essentially means none. An ABN is still required as is identification. The Low and No may refer to the quantity and/or quality of the documentation provides.
The documents refer to financial and other records which show the trading history and financial position of the enterprise. These may include tax returns, BAS returns, bank statements, accounts prepared by an accountant or by the owner and other such records.
Lenders may impose a limit on the loan amount they will approve to any applicant. This is relevant for both No Doc and fully documented applicants. No Doc applicants may have stricter limits imposed but this is based on individual lender decisions. It may be assessed on the basis of the perceived ability to repay the amount and credit history. The condition and type of goods being financed may also be taken into consideration.
Light commercial vans may be financed with this type of loan. This loan category is specifically structured to meet the requirements of enterprises which are just setting up and have not had time to accrue the necessary financial transaction history or trading history.
Yes. All kinds of commercial structures may apply for this type of loan including sole traders. The sole trader must have a current ABN and identification. By definition, no additional financial documentation may be required. The personal financial position and documentations of the sole trader may be requested as part of the application approval process.
Yes. When this type of application is approved, the operator may have their choice of funding product. The selection includes Leasing, Chattel Mortgage, Rent to Own and Commercial Hire Purchase. The tax benefits pertaining to the type of loan selected would be realised.
No. Being registered for GST is not a pre-requisite for this kind of funding. Applicants that are registered for GST may receive a more favourable view from the lender. Where an enterprise has an annual turnover of $75,000 or more, by law, the entity must be registered for GST.
A no deposit loan is when the total purchase price of the goods is included in the loan amount. The loan amount is subject to lender approval with all applications. With an application without all the documentation, a limit may be placed on the total loan amount approved. It is up to the discretion of the individual lender. The personal credit history and score of the business owner may be taken into account and additional security may be requested.
The goods being acquired with commercial funding typically form the security against the funds being extended. Applicants with no or little documentation may be requested to provide additional security or guarantees. This may take the form of assets owned by the business or the individual or a personal guarantee by the enterprise owner or a third party.
Where an applicant does not have all the documentation to complete an enterprise application form and/or with a new entity, the credit profile of the owner may be considered. Where the owner has a good credit score and meets other lender guidelines, this may be viewed favourably and result in a better interest rate offer or more favourable terms. Applicants can include relevant personal financials to support the application and offer personal guarantees.
Yes. The reference to no documentation is a description of the applying entity, not a type of funding product. When a lender approves an application for this kind of funding, the operator may have their choice of financing. Chattel Mortgage is an option for consideration. The suitability of Chattel Mortgage will depend on compatibility with business accounting methods and financial objectives.
All kinds of machinery and equipment may be financed with this funding option. This includes both new and second-hand models. Subject to individual lender approval as the asset being financed is considered in the application approval process. Heavy equipment and machinery used in many industries such as construction and earthmoving can be financed as well as delicate medical equipment and IT requirements.
When reviewing applications for this finance option, lenders may take into consideration the credit history of previously owned enterprises. Applicants can support their application by presenting documentation that demonstrates high creditworthiness and a good track record of meeting financial commitments. Information about previous loans will be reviewed by lenders during the credit history check.
Yes. Cars and other types of motor vehicles can be financed with this kind of funding. SUVs, passenger cars, dual cab utes, vans, and other vehicles used for commercial purposes may be considered for various commercial funding options. Both new and used vehicles may be financed. The age and condition of a second-hand car would be taken into consideration by the lender as part of the approvals process.