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Low Doc and No Doc business loans allow self-employed individuals and small businesses to access business finance without providing extensive financial statements.
The easiest and most popular method to gain fast approval is by applying online with a specialist non-bank lender.
In summary, low doc and no doc business loan in Australia:
Shopping around for the right loan can save you thousands of dollars in interest and fees.
Low doc and no doc business loans are similar to traditional unsecured and secured business loans.
The main difference is that low doc (low documentation) and no doc (no documentation) business loans allow small businesses and self-employed borrowers to access vital cash flow when they cannot provide financial statements or supporting documentation that would be required for traditional business loan approval.
The three primary benefits are:
Low doc and no doc loans are mostly used by small businesses with a short operating history, and self-employed individuals. Importantly, they are used by borrowers who cannot provide the necessary documentation for standard business loan approval. Owning a small business isn’t always easy, and having fast and simple access to business funds can be the difference between growth and closure.
Low doc loans are used when you are unable to meet qualifying criteria for a standard business loan and cannot provide business financial statements and tax returns for the past two years.
No doc loans are used when you are unable to provide any evidence of your business income or supporting documents.
Need fast access to finance or a one-time credit facility?
Low doc business loans are designed for business owners who have difficulty in meeting the strict approval criteria with their bank. This is why they are incredibly popular with new businesses and small businesses in Australia.
Small businesses benefit from the fast approval times offered by non-bank lenders — applying with these lenders requires minimal paperwork and provides access to finance which can then be used for a number of useful purposes.
This type of finance is often used by:
There are no restrictions on how you can use a low doc or no doc business loan. The number of uses for low doc business finance is as varied as the businesses who apply. You may wish to use funds to increase working capital, or purchase time-sensitive inventory or stock. Other popular uses include:
Interest rates on low doc business loans will vary between lenders. The actual rate applied to your loan will be dependent on a number of factors, including:
Similar to unsecured business loans, low doc and no doc lenders may apply a factor rate to your loan instead of an interest rate.
A factor rate is expressed as a multiple of the loan, which can make it more difficult to understand than an interest rate percentage — the amount of interest you pay on a low doc business loan will be calculated on the initial loan amount, not the ‘reducing balance’ — i.e. loan amortisation.
As interest rates and loan flexibility are assessed on the level of risk presented to a lender, low doc loans will have higher interest rates than standard business loans, and no doc loans will have higher interest rates than low doc loans.
Applying for a low doc or no doc business loan will be easiest through non-bank or specialist lenders. You may be asked to sign an income declaration, and you’ll still need to meet basic lender criteria and have:
The most important aspect of your application is proving your ability to meet your repayment obligations. For the majority of non-bank and specialist low doc finance lenders, you may also need to provide:
Applying for a low doc loan with your bank can be a time-consuming and stressful process — fast approval without needing to provide endless amounts of supporting documents is the main reason businesses apply for loans with non-bank lenders.
If you do choose to apply with your bank, you’ll need to supply extensive documentation about your business, such as:
You may also need to provide:
For the majority of self-employed individuals or small businesses, collating this much supporting documentation can be an arduous task. Even if you are able to provide this documentation, there is no guarantee you will be approved by your bank, and if you require fast access to finance, the length of the process may make applying a waste of time.
Low doc (low documentation) and no doc (no documentation) business loans are used when an individual or business owner cannot provide sufficient paperwork or supporting documentation to qualify for a traditional business loan. The main difference between a low doc or no doc business loan and other loans is the required paperwork to qualify for approval.
Many lenders in Australia offer low doc business loans. You can apply through your bank, however a low doc or no doc business loan will be easier to apply for through non-bank or specialist lenders — you can even apply online!
Lenders may also advertise a factor rate instead of an interest rate, and will be fixed for the entire term of your loan. A factor rate is a fixed amount calculated upfront on the full balance you apply for when taking out your low doc business loan. Even if you decide to make extra payments on the loan balance during the term, the amount of interest you pay won’t change.
No, a low doc or no doc business loan is defined by the application process — i.e. limited documentation is required to grant approval. Low doc and no doc loans can still be unsecured, however an unsecured full doc business loan will provide lower interest rates than an unsecured low doc business loan or unsecured no doc business loan.