Interest rates for low doc loans for cars have been again reduced. The rates have been reduced by another .25% This lowering of the rates is good news for small business owners. For all low doc car loans the vehicle must be used for business or commercial use.
To qualify for these low doc loans for cars the applicant must be either a sole trader, partnership or company. The small business owner must be ABN and gst registered for a minimum of two years. If you are a property owner it may be possible to do a vehicle no deposit low doc loan. For full details see page on Low Doc car Loans.
Everyone is now aware low doc loans are definitely harder to get than a few years ago. Having said that, as people become used to the new credit environment, we are now seeing customers start to offer BAS statements. This didn’t occur previously.
It seems people are now being conditioned by the banks that more paperwork is required when applying for low doc loans. The normal options are either Accountants letter, BAS statements, or trading statements. This extra paperwork applies to residential property low doc loans which are governed by the NCCP.
In regards to commercial low doc loans, in many cases we don’t require all this extra paperwork. We have recently been offered access to funding large low doc commercial loans with a minimum loan size of $3m. As well as the large low doc commercial loans there is now development finance becoming available for deals that the banks wont do.
As always, if you have a scenario regarding low doc commercial loans please call us.
Low Doc Loans with No BAS and no accountants letter are still available. For this low doc loan an ABN for two years and gst registration for one year is required.
These low doc loans will require twelve months trading statements for the self employed entity that is generating the income.
Currently there is no application fee, no ongoing fee and no early repayment fee with these low doc loans.
Why are you being asked for bank trading statements for the business entity generating the income?
Because under the new NCCP legislation we must make reasonable enquiries to verify a borrower’s financial situation and objectives.
As well as self certification, lenders have been asking for supporting information, such as:
• bank statements
• cash flow forecasts
• wages/income verification
• accountants verification, etc
For this particular loan BAS are not required. Instead, the bank trading statements are needed to show income going through the business entity.
As everyone is now aware, all residential lending is now governed under NCCP. This can only be a good thing going forward, as it will lead to even more responsible lending. Contrary, to what some media commentators are saying Low Doc Loans are not dead. The whole principal of lending is that borrowers should be able to repay their loan comfortably.
So what does this mean for low doc loans? It means any low doc loan must now be verified in one of three ways. Either bank trading statements, BAS or an accountant’s sign off only. Of these three, we have found the third option is the most popular. This makes sense, as many accountants have known their customers for a long time and are intimate with their businesses. So, if you are looking for a low doc loan, and have an accountant that is able to sign off on your declared income, please call us on 1300 LOW DOC