Small Biz Vehicle Loans To Get You Approved!
Faster, easier, fairer business car finance – Assistance where traditional lenders won’t.
Thousands of Australian business owners consider and/or purchase vehicles through their business. There are many advantages for doing so, from tax benefits, running costs and more. Whilst most lenders will provide finance to small business owners, the criteria and rates for approval can vary greatly.
Although the big banks provide good loan products in terms of rate, the flexibility for approval isn’t always as easy. This is where specialist lenders and nonbanks come in. They will provide similar or sharper rates combined with flexibility for funding.
General Criteria for Major Banks
If you do your business or personal banking with one of the majors, this may give you a slight advantage for qualifying for a small business car loan with them. Other criteria they may look at can include:
- Active ABN trading at least 12-24+ months
- Full financials of the business
- 550+ credit score
- Can require a deposit
Non-Bank & Specialist Lenders
Whilst the majors do have competitive small business car loans, specialist lenders provide more flexibility with approvals. Eligibility for these lenders may include:
- Active ABN for 6 months, even 1 day continuance ABN’s
- More low doc options
- 400+ credit score
- More options that don’t require a deposit
Small Business Vehicle Finance for Those with Bad Credit
Sole traders, contractors and other small business owners with less than perfect credit are still able to qualify for vehicle finance for their business. The main point of difference is that the rate will be higher and, in some cases, a decent deposit.
Situations that can make finance difficult are those that have been bankrupt within the last 10 years or in a debt agreement. Having a large amount of unpaid defaults will also see applications denied.
What Vehicles Can I Purchase Through My Small Business
There are no real restrictions on the type of vehicle you purchase for your business. The vehicle just needs to be used for business purposes to be able to take advantage of different tax benefits. Vehicles can also be divided up between personal and business usage.
Examples of vehicles that match business type can include:
+ Real Estate Agent purchasing a luxury car or SUV.
+ A Tradie purchasing a ute or van.
+ Restaurant owner purchasing a food truck.
+ A Uber driver purchasing any type of vehicle
Any business owner that can show that the vehicle is being used for business purposes can purchase a car or vehicle through their business.
Finance Designed For Small Business
At Comparison Australia we make finance for ABN holders simple. No hassle for all businesses regardless of size, time in business, industry, or location.
Access the best small business loans & get the lowest rates across 70+ lenders & banks.
Lenders Supporting Business!
- GST & tax breaks for ABN holders
- No deposit or paperwork options
- Approvals & funding in as little as 24hrs
- Secure or unsecure loans
- Purchase new/used vehicles or equipment
Applying For Small Business Car Loan
People also asked
How do I finance a car through my business?
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.
Are there any purchase restrictions on business car loans?
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.
Learn more about financing used vehicles and rates here.
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.
What are the main reasons businesses get declined for a car 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.
Is a vehicle cheaper with an ABN?
The overall costs of owning a vehicle through your business can be cheaper as there are GST & other tax breaks available.
How long does a business need to be trading to get car finance?
Most big lenders prefer your ABN be active for at least two years. However, there are certain lenders that will accept 6 month 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.
What type of insurance do I need if purchasing a vehicle through my business?
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.
What are the main car loan eligibility requirements for business owners?
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 car finance options and what documents will be needed.
How fast can I get a car loan with my business?
Depending on lender and what your after, there are very quick turnaround times for car loans. Borrowers after vehicle or equipment finance 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.