ABN Car Loan Bad Credit
Whether you’re running a small business with employees or are a sole trader, there are bad credit car loan options out there for ABN holders.
Having an ABN and bad credit doesn’t have to stand in the way of financing a car for your business. Specialist lenders understand that business credit histories aren’t always straightforward, and many are willing to look past a less-than-perfect credit file. Whether you’re a sole trader or operating through a company structure, it’s important to know that there may be options out there for you.
Can I get a car loan with an ABN and bad credit?
Yes, you can get a car loan with an ABN and bad credit. Lenders who work with business borrowers in this position are generally more flexible than mainstream lenders like banks when it comes to assessing both personal and business credit history. While your credit files are still important, they’ll place more weight on your current financial position and ability to manage your loan payments.
Most lenders will require your ABN to have been active for at least six to twelve months before they’ll consider your application if you have bad credit, as this gives them confidence that your business is established and generating income. That said, we work with some lenders who are willing to consider applications from ABN holders with as little as one day of trading history, so even startup businesses may have options available to them.
How does my credit score affect ABN car finance?
Your credit score plays a meaningful role in determining whether your ABN car loan application is approved and on what terms. A lower credit score generally means a higher interest rate, more limited borrowing power and a smaller pool of lenders willing to work with you. That said, specialist lenders assess the full picture rather than relying on your score alone.
In general, the following types of bad credit are more workable for ABN car loan applicants:
- Paid defaults, regardless of size
- Older defaults that are nearing the end of their five-year reporting period
- Paid or unpaid non-finance defaults, such as those for utilities or phone bills
And these are more likely to make approval difficult or unavailable altogether:
- Major unpaid finance defaults, such as those on a previous business loan or car loan
- Defaults that occurred very recently (most lenders don’t like finance defaults within two years of your application)
- A current bankruptcy or Part IX debt agreement
Every application is assessed on its merits, though, so it’s worth speaking to a broker if you’re unsure which options are available to you. This can help prevent you from submitting multiple applications with lenders whose criteria you don’t meet.
How much can I borrow for an ABN car loan with bad credit?
You may be able to borrow as much as $250,000 for your commercial ABN car loan, even with bad credit, with loans starting from as little as $5,000 with some lenders. The amount you’re ultimately approved for will depend on a range of key variables, including:
- The nature and severity of your bad credit
- How long your ABN has been active
- Your business’s turnover and overall financial position
- Your personal and business credit history
- Whether you’re able to put down a deposit
- The type, age and condition of the vehicle you’re looking to purchase
- The lender you’re approved with, as different lenders have different borrowing caps
All applications are subject to lender assessment, so your borrowing power will vary from business to business and applicant to applicant. If your business is still in its infancy or has more major credit issues, a $250,000 loan is very unlikely. These are usually reserved for those with longer, more established trading histories and consistently high turnover.
How to apply for a bad credit business car loan
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1
Fill out our online application form
Tell us about yourself and your current financial situation, as well as the loan you're after.
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2
Send through any necessary documents
We'll need to see documentation to verify your current finances and your identity.
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3
Have a chat to your broker
Your broker will give you a call and discuss your loan options.
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4
Lock in your chosen car
If you haven't already, we can help you find your car through our in-house car broker's national dealer network.
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5
Get your application submitted
Once you're happy to proceed, your broker will prepare your application for formal submission.
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6
Receive approval and settle your loan
You can be approved as soon as within one business day, after which we'll handle loan settlement.
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7
Drive away
Simply sign off and the car is yours!
Why Us?
Fast loan approval
We work hard behind the scenes to match you with a suitable lender and have your loan approved and funded in as few as 48 hours.
100% online
Where ever you are across Australia, you can apply for a bad credit car loan using your laptop or even a smartphone.
Trusted brand
For more than a decade, we've been helping borrowers with bad credit get approved for their car loans across Australia.
Car loan eligibility and documentation
Eligibility
- You must be 18 years of age or older
- You must be an Australian citizen, permanent resident or eligible visa holder
- You must be employed and earning a stable income that supports your car loan payments, which can start from as little as $480 per week
- Your chosen car must satisfy your lender’s vehicle eligibility criteria
Documentation
- A valid driver’s licence, front and back (passports can also be accepted)
- Your two most recent consecutive payslips
- 90 days of bank statements and/or Centrelink income statements
What are my other bad credit ABN car finance options?
If a standard car loan isn’t the right fit for your situation, there are a couple of leasing alternatives that may be available to you:
Finance lease
A finance lease is an arrangement where your business rents the vehicle from a leasing company for a period of one to five years. At the end of the term, you’ll need to pay the residual value, which you can do by buying the car outright, selling it, trading it in or refinancing and extending your lease term.
Operating lease
An operating lease works in a similar way to a finance lease, but there’s no residual value to pay at the end of the term, so you simply return the vehicle once the lease ends. This can suit businesses that prefer not to own their vehicle outright or who wish to turn over their vehicle stock every few years.
Frequently asked bad credit ABN car loan questions
Does my car have to be used for business purposes?
Yes, an ABN car loan is a commercial finance product, so the vehicle must be used for business purposes at least 51% of the time. If you're planning to use the vehicle for both business and personal use, you'll need to keep records of the split, as this will affect what you're able to claim as a tax deduction. If the vehicle is purely for personal use, you’ll need to take out a standard personal car loan.
Will I be able to claim my ABN car loan payments as tax deductions?
The interest component of your loan repayments and certain loan fees may be claimable as tax deductions, as well as the GST on the vehicle purchase and depreciation of the car. However, the loan principal (the loan itself minus interest and fees) isn’t tax-deductible.
The amount you can claim is subject to how much the vehicle is used for business purposes. For example, you’ll only be able to claim up to 75% of the above deductions if you use your car for personal purposes 25% of the time. As with any tax matter, it's worth speaking to your accountant to understand exactly what applies to your situation before making any claims.
Can I get an ABN car loan with no credit check?
No reputable lender will approve a car loan without conducting some form of credit assessment. Lenders are obligated to determine whether a loan is suitable and affordable for you and your business before approving your application. That said, specialist lenders place far less emphasis on your credit score than mainstream lenders, focusing instead on your overall financial position.
Can I get an ABN car loan with bad credit as a sole trader?
Yes, sole traders can apply for an ABN car loan with bad credit. We work with lenders who can approve loans for sole traders in this position, so speaking to one of our brokers will help you find out what your options are.