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Self Employed Loans

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, self employed 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.

Each lender will have its own criteria based on the age of the vehicle/equipment, LVR amount and credit assessment. In most circumstance the newer the vehicle or equipment the better for approvals. There are however certain lenders that specialise in funding older or unique vehicles and equipment.

Comparison Australia’s partners have access to 70+ lenders and banks making it easier for borrowers to find a lender that will fund most things.

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.

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.

– Incoming producing vehicles or equipment help demonstrate that they are earning their keep. Whilst it may be a depreciating asset, its generating income the whole time for the business.

– Having a good credit history goes without saying, will always help with approvals and better finance options.

The overall costs of owning a vehicle can be cheaper as there are GST & other tax breaks available.

Most lenders prefer your ABN be active for at least two years. However, there are many lenders that will accept 1 year ABN’s or less based on different circumstances such as ‘business continuance’ or strong cash flow.

A quick chat with Comparison Australia partners can provide current options across different lenders and their ABN length requirements.

You’ll need to get a comprehensive car insurance policy just like you would if purchasing an normal vehicle, so it’s important to factor that into your budgeting.

The below are general requirements a lender may request.

You’ll first have to confirm that:
– You are a active ABN holder
– That the vehicle will mostly be used for business purposes (i.e. more than 50% of the time)

Proof of Identity (one or multiple of the following)
– Drivers licence
– Passport or Proof of age card
– Valid Medicare card
– Valid credit card or debit card
– Can also use a valid Veteran card

Documents can include any of the following:

– Proof of residence via a rates notice
– Financial statements (ideally from an accountant)
– Bank statements (generally 2 months, possibly more)
– Recent Business Activity Statement (BAS)
– ATO Tax Agent portal report (generally for a trading period)
– Accountants letter confirming business activity
– Depending on trading structure: Income tax return and/or Personal tax return (1 financial year)

Other documents may be requested based on individual business circumstances. For those that may have a difficult time producing these documents, a low or half doc loan may be preferred.

Speak to a Comparison Australia partner to quickly learn about self employed finance options and what documents will be needed.

A self employed loan is simply a business loan which can be secured or unsecured. If you are a business owner in need of working capital, a vehicle or equipment, an ABN loan may work for you.

See our FAQs section on types of self employed loans along with general requirements for applying.

If you wish to speak to a finance specialist, please contact us and we’ll be happy to answer any questions.

Depending on lender and what your after, there are very quick turnaround times for ABN loans. In certain circumstances borrowers can receive unsecure funds in the same day or within 24 hours. Borrowers after a secure loan for a vehicle or equipment can get funding as quick as 24 to 48 hours.

Quick funding is dependant on having all documents required by the lender ready to go for immediate assessment and approval.