What Is a Low-doc Loan?
If you need to expand your company’s operations, improve your business facilities, or upgrade your tools and vehicles but your accountant hasn’t prepared your financial statements yet, there’s an equipment finance option you can’t miss: low-doc loans.
A low-doc loan is a type of financing with low documentation (that’s what “low-doc” means). In other words, if you’re looking for financing to pay for what your business needs, you don’t have to supply mountains of paperwork to apply for it.
Since it isn’t as strict as other alternatives, these equipment, vehicle, and truck loans are great for those who cannot provide the financial records or years of tax returns often required in standard financing.
How Do Low-doc Loans Work?
If you need equipment or truck finance and plan to apply for low-documentation loans, you must confirm that you have enough income to repay the debt.
Therefore, you should first do a self-verification to confirm that you really earn enough money to apply for equipment or car loans. After that, you must sign a declaration document defining your earnings and your sources of income.
If your business is relatively new or you’re looking for equipment or truck finance for your startup, you won’t have to show many financial documents. However, you always have to submit income details through bank statements, which are easier to get.
Who Are Low-doc Loans For
As mentioned, they were designed for borrowers who cannot provide the necessary documentation that other types of financing often require.
Business owners often opt for low-doc vehicle and equipment finance when a growth opportunity suddenly appears. It’s also a good option when they need to replace worn-out machinery or want to buy a new truck to run their operations.
While all Australian businesses can leverage low-doc finance, these loans are popular among the following borrowers:
- Companies looking for truck finance options
- Owner-driver haulage operators who need to buy trailers, trucks, and tools but don’t have all the traditional documents
- Café and restaurant operators who need to purchase expensive kitchen and coffee-making tools
- Couriers who need equipment finance to buy commercial vehicles
- Farmers seeking equipment financing to purchase agricultural machinery, including tractors and harvesters
- Tradies planning to get self-declaration finance to invest in vehicles and tools
- Contractors with chattel mortgages
Pros of Low-doc Loans for Equipment Finance
If you’re looking for equipment finance to buy the vehicles and tools you need for your business, low-doc loans are an excellent option. These are some of their benefits:
What Documents Do I Need to Apply for a Low-doc Equipment Loan?
Do you need equipment finance and plan to apply for a low-doc loan? Some lenders only require borrowers to submit their Identification and fill out the application form.
However, some equipment finance lenders ask for a few extra details and documents, which may include:
- Business bank account statements
- Evidence of future orders
- Letter or projections from an accountant
- Previous business activity statements
- Business income declaration form
Low-Doc vs. Full Doc Equipment Finance
If you’re looking for equipment, car, or truck finance and find different alternatives, you should analyse each one well to determine which is the best for you. Let’s take a look at the main differences between low-doc equipment loans and standard options.
Main Differences
- Low-doc applicants may require a deposit to purchase the equipment they plan to buy on finance.
- Depending on the lender, low-doc loans offer different terms and interest rates.
- Unlike standard equipment loans, you don’t need to provide financial reports or tax returns when you apply for a low-documentation home loan.
Final Thoughts
Getting an equipment or truck loan doesn’t have to be complicated. We understand that! That’s why Westend Finance’s specialists are ready to guide you through every step of the process and help you obtain financing to purchase what your business needs.
Do you want to know more about our services? Check out this video and discover everything we can do for you!
Frequently Asked Questions
Yes, they can. Depending on your application, credit score, and the type of equipment you are purchasing there a No-Deposit Truck Loan options available.
It depends on the lender and loan product. However, while equipment and truck loan lenders all charge fees, we’ll help you find one with the best possible loans with the lowest fees.
All lenders have different conditions and offer loans to specific clients. However, these options were designed for all circumstances!
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