Distinguishing Between 1 Day ABN Loan Types
There are essentially two types of 1 day ABN loans available for very different scenarios. The first is for established ABN’s looking for a quick same day loan. There are many options available for this type of business loan. A simple loan enquiry will provide you with options to apply and access immediate funding.
The other scenario is for those starting a business and would like to know how to get finance for a new ABN. Starting a business can be challenging and being able to access funds to help start or grow your business can be difficult. As a new ABN holder, lenders will view your business as risky as there will be minimal to no trading history.
Getting A Loan For A New Business
There are however different banks and specialist lenders that support new businesses with different types of lending.
Below are different scenarios where lenders will consider providing finance to a new business with a ABN between 1 day and 2 years old.
- A new business where the owner has previous industry experience and has secured contracts to go out on their own.
- An older established ABN which was cancelled but then reinstated, with resent trading activity or contracts in place.
- A new business with some trading history where documents for proof can be provided by an accountant.
- A new business that can provide collateral to secure the loan.
My New Business Has Irregular Activity
There are many other situations where a lender may be willing to provide finance to a new ABN. Establishing your business can meet repayments is key. Speaking with a broker is a great first step to see what you either qualify for now or what you need to do in a short period to be able to qualify for a loan in the near future.
A broker can provide invaluable guidance on what lenders require and what your business needs to show to be eligible for a loan.
Finance Designed For ABN Holders
At Comparison Australia we make finance for ABN holders simple. No hassle for all businesses regardless of size, time in business, industry, or location.
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- GST & tax breaks for ABN holders
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Applying For A New Business ABN Loan
People also asked
How do I finance a car with my ABN?
You can finance a new/used vehicle or equipment through your ABN (business) with most lenders. The main criteria is to be able to prove to lenders and the ATO that it will be used for business purposes and qualify for the loan.
With regards to lenders, borrowers can access both full doc or low doc ABN finance options and in some cases half doc.
Full doc finance is a traditional loan and may require a large amount of paperwork; including tax returns, bank statements, business activity statements and up to date accounts. Rates for full doc loans are often lower than low doc finance.
Low doc finance is popular as it requires less paperwork along with a bit more flexibility in approvals. General lender requirements for low doc finance may include; recent BAS or from previous year, summary of business accounts, possibly a deposit or be asset backed.
Half doc finance is obviously in the middle of the other options, typically requiring documents like a BAS + 6 months bank statements.
In all cases the better your credit the better your rate and chances of approval.
A quick chat with the Comparison Australia team can quickly highlight options across our large panel of lenders.
What are the main reasons businesses get declined for a ABN loan?
The main reasons a business owner may get knocked back from finance include:
– ABN age and activity. Those with a short trading history may not be able to demonstrate steady income. (However there are instance where 1 day ABN’s or business continuance can be approved due to prior history)
– Not being GST registered will reduce options, often reducing the amount a lender will provide.
– Poor credit or banking conduct. Low running balances, late fees or dishonours will often lead to a decline in funding.
– Negative or low cash flow will impact serviceability resulting in declines. The business must show the capacity to repay the loan on top of general business running costs.
– Business in liquidation or being de-registered by the government will not be able to borrow.
The above are some of the more common reasons a business will not qualify for finance. By speaking with a Comparison Australia partner, they will be able to quickly outline potential options if your dealing with any or multiple points above. Whilst borrowing options will be reduced or tricky, there still may be specialist lenders willing to provide funds.
How can I improve my chances of qualifying for a loan with a new ABN?
Below are some of the best ways to improve your chances of approval.
– Register for GST as this tells lenders straightaway that your business turns over at least $75,000 a year.
– Have a deposit, the bigger the better. This helps reduce risk to the bank as the asset has some of your money against it.
– Strong banking figures showing good and steady cash flow/turnover.
– Have proof of contracts and be able to provide what few invoices you have.
– Having a good credit history goes without saying, will always help with approvals and better finance options.
– Be able to show how the funds or vehicle well be used for the business.
Low doc new business ABN loans
For 1 day or newer ABN’s, providing all the documentation needed to qualify can be difficult. In these situations, a low doc or no doc loan can be a great option to access cash needed to grow your business.
Comparison Australia’s broker partners have access to Australia’s leading low doc lenders in addition to other finance options for newer businesses.
Do I need to be GST registered to qualify for a new business loan?
In most cases being GST registered is required to qualify for a business loan. In cases where lenders do allow for non-GST registered applicants, the loan amount will be much lower.