Low Doc Car Loans: The Simple Path for Your Business:

Low doc business car loans offer fast, flexible financing with minimal paperwork, ideal for busy business owners:

• Requires simple income proof like bank statements or an accountant’s letter
• Faster approval than traditional loans, even with less-than-perfect credit
• Brokers like Fox Finance Group offer more lender options and better deals

As a business owner, you know that time is your most valuable asset. Yet securing a business car loan with traditional lenders, or directly with dealers, often demands an overwhelming amount of paperwork, financial statements, tax returns, and documents that may be a challenge to get.

Frustration can mount as collecting these documents takes your valuable time away from the business, meaning you potentially miss further opportunities to grow! Not anymore! With the guidance of Fox Finance Group, you will get stress-free, quick, and easy financing with our low doc car loan.

What are Low Doc Business Car Loans?

A low documentation (low doc) loan is designed for a small business owner or self-employed person who doesn’t have the extensive documentation typically required for traditional lending.

Unlike standard vehicle loans, a low doc business loan requires minimal paperwork, and focuses more on the following:

• Proof of Income: You would need to demonstrate your income with bank statements (90 days or 3 months), business activity statements (BAS), or an accountants letter verifying your income.
• Credit History: Lenders will look closely at your credit file to determine if you qualify for a low doc car loan. A positive credit history will help in improving your chances, but there are lenders on our panel who will assist if you have less-than perfect credit.

Low Doc vs. Traditional Car Loans:

If you have thought about going with a traditional car loan for your business, it would be beneficial to understand the four differences between a low doc car loan vs. a traditional car loan:

1. Documentation Requirements:

Low Doc: Minimal documentation required. Acceptable documentation for income can be bank statements, BAS (Business Activity Statements), or a declaration of your income from your accountant.

Traditional Car Loan: Requires full documentation, including payslips, tax returns, and employment verification if needed.

2. Interest Rates:

Low Doc: Typically comes with higher interest rates due to limited documentation required, leading to an increased risk for the lender.

Traditional Car Loan: Offers lower interest rates who have a strong profile and can supply full documentation for income.

3. LVR (Loan-to-Value Ratio):

Low Doc: May have lower maximum LVRs, meaning a higher deposit from you may be required.

Traditional Car Loan: Generally, allow higher LVRs, especially for applicants with good credit scores.

4. Approval Speed:

Low Doc: Can be process faster due to fewer documents required, though it can vary depending on the lender you choose.

Traditional Car Loan: May take longer because of the detailed documents required and verifications the lender will do.

Understanding Loan-to-Value Ratio (LVR):

When exploring your low doc car loan options for your business, you’ll likely encounter LVR as it is an important metric comparing how much you’re borrowing against the actual value of the vehicle you are wanting to get.

Simply, LVR represents the percentage of a car’s value that you’ll be financing through a loan. The lower your LVR, the less risk for the lender.

Let’s imagine the following for a simple example:

You found the perfect car for your business, and it is priced at $20,000 and you saved $2,000 to use as a deposit, this means you only need to borrow $18,000 from your lender. Your LVR calculation would be:

$18,000 (loan amount) / $20,000 (car value) = 0.9 or 90% LVR.

Different lenders will have different maximum LVRs that they will allow. This becomes particularly important with low doc business car loans where lenders may only allow a lower LVR due to the reduced documentation requirements, meaning you’ll need to have some sort of deposit.

How to Improve Your Approval Chances:

Getting approved for your low doc business car loan is the ultimate goal, so to help improve your chances look to use the following:

• Maintain clean business bank accounts.
• Separate personal and business expenses.
• Ensure your ABN is active and in good standing.
• Prepare a simple business case explaining how the vehicle will benefit your business operations.
• Consider offering additional security or have some savings for a deposit to help overcome any LVR issues that may arise.

The Low Doc Car Loan Advantage:

We recently sat down with our Head of Asset & SME Lending, Sam Drew, who shared valuable insights on low doc car loans, stating:

Filling in paperwork takes time. Lots of it, and once you’re done, if a dealer finds any reason to decline you, then it can fee like the rug has been pulled out from under you. We recently had a customer experience a similar situation. After organising finance through a car dealer, filling out the mountains of paperwork, the dealer decided not to proceed with the application at the time of settlement due to a past issue. This left them with no car. So, the customer reached out to us and within 24 hours, we had them approved under our low-doc assessment, even with a lower credit score. Not only that, but they also picked up the car they wanted at a cheaper rate than the dealer offered! That’s the power of working with us. As brokers, we’ve got over 50 different lenders, so we can tackle situations a dealer simply can’t. 

Take the Next Step for Your Business:

Don’t let the mountains of paperwork stop you from growing your business. Apply now for stress-free, quick, and easy financing!

To learn more about how low doc business car loans and the myths that are told, check out our blog, ‘7 Common Myths about Low Doc Business Car Loans Debunked’