Low Doc Car Loans
If you’re self-employed and don’t have the documents you need for a standard business car finance deal, a low doc car loan could be an option for you.
Not everyone can start their business car finance application with a folder full of payslips and tax returns. That’s where low doc car loans can come in handy. If you’re a self-employed borrower who has the means to take on a loan but can’t verify your income through the standard documentation that most lenders require, it’s worth knowing that there are options available to you.
What is a low doc car loan?
A low doc, or low documentation, car loan is a type of commercial car finance designed for borrowers who aren’t able to provide standard proof of income documentation. Rather than asking for payslips and tax returns, lenders offering low doc car loans will accept alternative forms of documentation to verify your income and assess your ability to meet repayments.
Low doc car loans work in much the same way as any other business car loan. You borrow a set amount, repay it with interest and fees over an agreed term and the vehicle typically acts as security for the loan. The main difference is simply in how your income is verified along the way.
Who is a low doc car loan for?
The borrowers who tend to benefit the most from low doc car finance are:
- Self-employed borrowers and small business owners who don’t pay themselves a wage and whose income fluctuates from month to month, making standard payslip-based assessment difficult
- Sole traders and ABN holders who may not have recent tax returns available or whose declared income doesn’t fully reflect their earning capacity
- Contractors and freelancers who work across multiple clients or engagements rather than a single employer
Because low doc car loans are a commercial product, they aren’t available to borrowers who are planning to use their car for personal purposes more than 49% of the time. If you find yourself in one of the above categories, though, a low doc loan could be the right fit.
What are the requirements for a low doc car loan?
Eligibility requirements can change depending on the lender you apply with, but to qualify for a low doc car loan, you’ll generally need to meet the following criteria:
- You must be at least 18 years old
- You must be an Australian citizen, permanent resident or eligible visa holder
- You must have an ABN registered in your name (this can be as early as a one-day-old ABN)
- You must be purchasing a car that meets your lender’s age, condition and vehicle type criteria
- You must use your car for business purposes at least 51% of the time
The documentation requirements for a low doc car loan also vary between lenders, but in place of standard payslips and tax returns, you’ll typically be asked to provide some combination of the following:
- A valid form of ID, such as a driver’s licence or passport
- Information on your business’ assets (such as equipment or property) and liabilities (such as other loans)
- Information on your personal assets and liabilities
- Business Activity Statements (BAS), typically covering the last one to two years, may be required
- Business or personal bank statements, usually covering the last three to six months, may be required
- A signed accountant’s declaration or letter confirming your income may be required
The exact documents required will depend on your lender and your business and personal finances. It’s worth noting that property owners may not need to provide much documentation at all, while non-property owners might be required to pay a deposit of 10% to 20%. A broker can help you understand exactly what you’ll need to have ready before you apply.
How much can I borrow with a low doc car loan?
Low doc car loans are available from as little as $5,000 up to as much as $250,000 with some lenders, though your individual borrowing power will depend on a range of factors specific to your business’ situation. These include:
- How long your ABN has been active and your business has been trading
- Your business’s turnover and current financial position, including outstanding debts or accounts payable
- Your personal and business credit history
- Whether you’re a residential or commercial property owner, as this will often significantly boost your borrowing power
- The type, age and condition of the vehicle you’re looking to purchase
All applications are subject to lender assessment, so the amount you’re eligible to borrow will vary from applicant to applicant.
Can I get a low doc car loan with bad credit?
Yes, it’s possible to get a low doc car loan with bad credit, though the combination of limited documentation and a less-than-perfect credit file will narrow your options. Lenders who offer bad credit car loans are generally more flexible than mainstream lenders when it comes to assessing both income documentation and credit history, focusing instead on the bigger financial picture and your business’ ability to meet repayments.
As with any bad credit finance product, you can expect higher rates and fees than someone with a clean credit file. Working with a broker who has experience in both low doc and bad credit lending can help you identify which lenders are most likely to work with your specific situation.
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.
Frequently asked low doc car loan questions
What is a no doc car loan and how is it different?
A no doc car loan is a step further than a low doc loan, requiring little to no income documentation at all. While they do exist, genuine no doc car loans are rare in Australia, with the name often used interchangeably with low doc. Most loans that are marketed as being no doc are actually low doc, but it’s important to be aware of any difference in terms and conditions.
Are low doc car loans more expensive than standard car loans?
They can be. Because lenders have less income documentation to work with, they may factor in a slightly higher level of risk when setting your rate. This is especially the case if you have bad credit. That said, loans for business owners and operators who own property often aren’t more expensive, as not submitting documentation is more or less standard.
Do low doc car loans have any tax benefits?
Yes, as a commercial finance product, low doc car loans can come with similar tax benefits to other business car loans. The interest component of your repayments, certain loan fees, depreciation and GST on the vehicle purchase may all be claimable as tax deductions, subject to how much the vehicle is used for business purposes. As always, it's worth speaking to your accountant to understand exactly what applies to your situation before making any claims.