2020 presented plenty of challenges but equally many opportunities. 2021 could be the year to capitalise on opportunities, crystallise and realise those aspirations and make the move to set up your own business. Starting a new business is an exciting prospect. But your enthusiasm, passion and initiative may also require a finance partner to assist in making your aspirations a reality.
Many banks and lenders place strict guidelines on business car loans for new businesses. Most stipulate at least 12 months in operation sometimes 18 to 24 months to be eligible. If that vehicle is an integral part of your business, if you need that delivery van, ute or work vehicle of any kind to carry out your work you may face a dilemma in moving forward.
Jade Car Loans assists new business set-ups with our ABN-only and Low Doc Car Loans. This category of loan is available predominantly through our non-bank lenders and while the loans do carry additional conditions to standard car loans, they can be cost-effective and workable solutions.
New Business Loan Options
If you are starting a new business and do not qualify for the standard car loan, you may be eligible for:-
- ABN Car Loans
- Low Docs Car Loan
- No Docs Car Loan
As the titles imply, these loans are structured for businesses that do not have all the documents or who do not meet all the standard criteria for business vehicle finance. By ‘docs’ we mean financial documentation such as business tax returns, BAS statements, annual business accounts and other similar records. For example, to have lodged a business tax return you will have needed to be trading before June 30 2020. If you’ve started a business since that time, you would not have needed to submit a tax return as yet.
Eligibility and Conditions
The differences between ABN, Low Docs and No Docs loans essentially relate to the amount of docs that you have to support your car finance application. In simple terms, the more docs the more favourable the loan conditions may be. Also the better your credit profile the better the finance deal.
- An ABN is essential as is identification.
- You don’t have to be registered for GST but it can be viewed as more favourable by some lenders. If you are registered by GST and have submitted BAS statements, they are considered as docs.
- Even simply prepared profit/loss, income/expenditure records can be submitted with your application. They don’t necessarily have to be accounts prepared by an accountant but simple spreadsheets supported with bank statements may assist.
- A good credit profile is very important. If you haven’t reviewed your credit rating and history recently, it may be time to do that now. A copy of yours can be attained from several credit reporting agencies and details of how you can ‘fix’ or ‘repair’ any issues with your report are available online. Addressing any issues before applying for a loan can be an astute move.
- Loans in these categories can be approved based on the interest rates available on fully documented loans but with additional conditions applied to the loan. You can review the interest rates on different loan types on our compare interest rate chart.
- Conditions may apply around additional security. With the loans offered by Jade, the vehicle is used as security against the finance extended. However, some lenders will require additional security. This may be in the form of other property owned by the business or business directors personally.
- Conditions may be attached to the total amount of the loan. Some lenders may request the total amount be reduced.
- To be eligible for business finance, the vehicle must be purchased for use in the business. Not solely for private use.
If approved for these categories of finance, the full choice of commercial loan products is available for your vehicle purchase. These include Chattel Mortgage, Leasing and Car Hire Purchase. Each finance product has tax benefits derived in varying ways and presents varying benefits depending on the structure of the business. It is advised to refer to your accountant regarding the choice of loan type.
Types of Vehicles
When approved for a Low Docs, No Docs or ABN car loan, this loan can be used to purchase a wide range of business vehicles: sedans, hatches, SUVs, utes, delivery vans and many others.
How to Apply
You can apply for an ABN or Low Docs car loan with Jade either online or over the phone. If you are unsure of if you will be approved or how much you may be approved for, it can be useful to discuss pre-approved car finance.
Your Jade consultant will source you a quote based on a rough idea of the vehicle you intend to buy and an estimate of the price. If your application is approved, you will then receive an amount that you have been approved for and can proceed to purchase.
This can be extremely helpful for new businesses to plan and prepare ahead of time for major acquisitions.
Your Jade consultant will be on hand and available to you to assist with all stages and steps in the finance process to save you hassle and worry and deliver you a workable car finance solution.
To discuss your new business loan options contact Jade Car Loans at 1300 000 003
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