Low Doc Business Loans

Even without the key documents, there are still options available to your business. Find out more about low doc loans with Savvy.

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, updated on July 26th, 2023       

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The features of low doc business loans

Alternative documentation requirements

You can apply without having the required tax returns, instead utilising alternative documents such as an income declaration, Business Activity Statements (BAS) and bank statements.

Use them however you like

There aren’t any real restrictions on how you can use your business loan (provided that it’s for business purposes), providing you with greater freedom to do what you like with your funds.

Fast approvals

Even without the documents required for standard business loans, you can have your low doc business loan turned around in a matter of days, giving fast access to the funds you need.

Decide your borrowing term

You get to choose whether to make your low doc loan a short-term one over as few as three months or a longer-term repayment of two to three years (in some cases more).

Online application and approval

The application process is a convenient one for borrowers, as you can fill out your form, submit your documents and sign your contract entirely online.

Broad eligibility

Your business only needs to have been trading for a minimum of six months to qualify for most loans, with ABN and GST registration and permanent residency other common requirements.

Low doc business loans explained

What are low doc business loans?

A low doc business loan (short for “low documentation”) is a loan specifically tailored for customers who, for one reason or another, don’t have sufficient records of their business finances. This is primarily the case because they simply don’t exist due to the business being in its infancy, although it may also be necessary as a result of inadequate record-keeping or the loss of important files.

Normally, a business lender in Australia will require you to submit tax returns and business records for the last two years your business has been operating. For some businesses, this can be difficult. A self-employed worker may not need to keep the same level of detailed records that a larger business might and if your business has only been running for six to twelve months, you might simply not have the records expected for a standard business loan. This is where low doc loans come in.

Low doc loans are generally much easier to apply for, as – by definition – there's less paperwork expected. They’re also relatively easy to get approved and getting one can have certain tax benefits (such as repayments being GST free). The trade-off is a low doc business loan might be a little more expensive than regular loan business finance (also called a full doc loan) in terms of interest rates.

What do I need to apply for a low doc business loan?

Requirements for low doc and no doc business loans vary but, as a general guideline, you’ll need an ABN that’s been active for at least two years, at to be registered for GST. In terms of the documentation you do need, you should plan to provide the following.

  • Personal identity documents such as a passport and/or driver’s licence
  • Six months’ worth of bank statements for your business
  • A signed income declaration (which is generally sent to you by the lender).

You may also need six months’ worth of BAS documents and a letter from your accountant confirming projected income.

The standards are different for different lenders, though. Some don’t require GST registration. Some only require an ABN to have been active for six to 12 months. Some require collateral from you, while others don’t. It’s worth shopping around and seeing what each lender requires before settling on a particular low doc loan. Savvy’s a great place to start that process, allowing you to easily compare different small business loans and find the best finance choices that suit your documentation needs.

Types of business loan

Why compare business loans through Savvy?

How do I compare different low doc business loans?

Frequently asked questions about low doc business loans

What is an income declaration for low doc business loans?

This is an official legal document you use to declare your business’ income when you don’t have the paperwork to demonstrate it. It’s a little like signing an affidavit – you're officially, formally and legally stating what your business has earned in a given period, rather than providing evidence.

Can I change a low doc business loan to a full doc loan down the track?

Yes – although you can’t simply switch a low doc loan over to full doc, most commercial loans can be refinanced if your situation changes, and low-doc loans are no different. You’ll want to check the specifics of this with your lender though, as some lenders charge high fees for this – which can lessen the benefit of switching.

Is using a low doc loan bad for my credit rating?

It’s no worse than any other loan – the application requires a hard credit check which causes a slight dip in your credit score, but this is the same with any loan application. The fact it’s a low doc loan makes no difference to your business’ credit.

Are there bad credit low doc business loans?

Yes – some commercial lenders offer low doc loans to businesses with bad credit. They’ll come with higher fees than a standard low doc loan, so you should bear that in mind when assessing your options.

Are there restrictions on what I can use the funds from a low doc small business loan for?

Not really – modern business loans have a lot of flexibility in terms of what the money can be used for, so a low doc loan could be used for property maintenance, equipment upgrades, set-up for special events or conferences, wages in a period of temporary shortfall, or buying a business vehicle. As long as you’re declaring the purpose of the loan in your application, and it’s specifically for business purposes, it’s your choice what you do with the money.

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