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Struggling to prove your income?

When you apply for commercial finance, many lenders want to see proof of a regular, stable income before approving your loan. This usually takes the form of business financial statements and tax returns for the past two years. 

But you might not have this proof on hand. For example, you could be:

  • a start-up with limited income history
  • self-employed with a seasonal income that ebbs and flows
  • reinvesting your profits in the business

Whatever the reason, a low doc loan might be the business funding solution you need. That’s because low doc loans come with fewer requirements than traditional business finance. 

You might only need to provide: 

  • An income declaration confirming your current business income
  • A business activity statement (BAS) proving your business is active

Using your BAS, the lender then assumes a percentage of your total business turnover as your income.

Alternatively, you can also apply for a no doc business loan which, as the name suggests, comes with no documentation requirements at all. Instead, you self-declare your business income (although a lender will likely run a credit check before approving your loan). 

As both low doc and no loans are riskier for lenders than traditional loans, you will likely have to provide collateral as security. This is typically in the form of property, including:

  • Commercial property
  • Rural property
  • Residential property
  • Industrial property

Low doc and no do business loans generally come with higher interest rates than full doc financing, to reflect the additional risk to the lender. 

So how much can you borrow?

Low doc and no doc loans are always assessed on a case-by-case basis. That said, most lenders cap the amount you can borrow at 65% of the value of the property you offer as security for the loan. However, some go as high as 80% – and Commercial Loans knows the lenders that do. 

We have relationships with a large range of low doc and no doc lenders, so can match you to the right loan – whatever your circumstances.  

Struggling to prove your income?

When you apply for commercial finance, many lenders want to see proof of a regular, stable income before approving your loan. This usually takes the form of business financial statements and tax returns for the past two years. 

But you might not have this proof on hand. For example, you could be:

  • a start-up with limited income history
  • self-employed with a seasonal income that ebbs and flows
  • reinvesting your profits in the business

Whatever the reason, a low doc loan might be the business funding solution you need. That’s because low doc loans come with fewer requirements than traditional business finance. 

You might only need to provide: 

  • An income declaration confirming your current business income
  • A business activity statement (BAS) proving your business is active

Using your BAS, the lender then assumes a percentage of your total business turnover as your income. 

Alternatively, you can also apply for a no doc business loan which, as the name suggests, comes with no documentation requirements at all. Instead, you self-declare your business income (although a lender will likely run a credit check before approving your loan). 

As both low doc and no loans are riskier for lenders than traditional loans, you will likely have to provide collateral as security. This is typically in the form of property, including:

  • Commercial property
  • Rural property
  • Residential property
  • Industrial property

Low doc and no do business loans generally come with higher interest rates than full doc financing, to reflect the additional risk to the lender. 

So how much can you borrow?

Low doc and no doc loans are always assessed on a case-by-case basis. That said, most lenders cap the amount you can borrow at 65% of the value of the property you offer as security for the loan. However, some go as high as 80% – and Commercial Loans knows the lenders that do. 

We have relationships with a large range of low doc and no doc lenders, so can match you to the right loan – whatever your circumstances.

Testimonials

What do our clients say about their experience?

“I have absolutely no hesitation in scoring Commercial Loans 10 out of 10 for their service. They’re professional, respond to enquiries quickly, get you competitive rates and are so easy to work with. Job done!!”
Lisa H.
“Due to the complex nature of our situation, I have had very disappointing experiences in the past. But dealing with Commercial Loans has been an absolute pleasure. They look outside the box and really listen to what funding requirements you have. We felt totally supported throughout the process. You should give them a try!”
Stuart P.
“This was my first business loan – and I couldn’t have asked for a better experience. A friendly and professional team were on hand to assist every step of the way. I had loads of questions, and they took the time to explain everything clearly to me. Highly recommended.”
Mike R.

What’s a lease doc loan?

It’s not just businesses that sometimes find it tricky to get approved for finance. Commercial real estate investors can too, especially when you don’t have evidence of your income. 

That’s where lease doc loans come in. 

Lease doc loans let you use rental income as proof you can afford to repay your loan. That means no payslips, tax returns, bank statements, BAS or financial statements are required.

So how does this type of finance work?

Just like a low doc loan, you have to provide collateral as security. However, in this case, it must be a commercial or residential property with at least 12 months remaining on the lease. 

The lender then looks at the:

  • Financial strength of your tenant
  • Remaining term of the lease
  • Interest cover ratio

The interest cover ratio (ICR) measures the number of times your lease income covers the interest on your debt.

For example, imagine you apply for a $1 million lease doc loan. The lender will assess your application using a rate higher than the standard commercial rate they offer, as a buffer. So, if, say, the rate on offer is 5%, they might assess you at 7%

One year’s interest payments total $70,000 – so an ICR of 1 would mean you’d need at least $70,000 net rental income per annum to qualify for the loan. An ICR of 2 would mean you’d need at least $140,000.

Many lenders typically look for an ICR of 1.3 or above on lease doc loan applications – though some will consider lower.

Not many lenders offer lease doc loans, so it can be difficult to find the best lease doc loan for your unique situation. But Commercial Loans is experienced in this area, and can help you solve your problem.

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Low credit score? We can help

When you apply for commercial finance, lenders look at your personal credit report as well as your business financials when they assess your application. So does this mean you won’t get a commercial loan if your score is less than perfect?

Not exactly, but it can limit your options. 

That’s because many traditional lenders are risk-averse. So many will just say ‘no’ even if your business fundamentals are good. 

However, some specialist lenders are more forgiving. So they’ll consider other lending criteria such as your capacity to make loan repayments, over and above your personal credit rating.

If you have a low credit score, the worst thing you can do is apply to the wrong lender. Getting rejected on your loan application can damage your credit score further. So it’s crucial to do your research.  

That’s where we come in. With over 100 lenders on our books, including specialist and alternative financing options, Commercial Loans can help you get the loan your business needs, even if you have a low credit score. 

Low credit score? We can help

When you apply for commercial finance, lenders look at your personal credit report as well as your business financials when they assess your application. So does this mean you won’t get a commercial loan if your score is less than perfect?

Not exactly, but it can limit your options. 

That’s because many traditional lenders are risk-averse. So many will just say ‘no’ even if your business fundamentals are good. 

However, some specialist lenders are more forgiving. So they’ll consider other lending criteria such as your capacity to make loan repayments, over and above your personal credit rating.

If you have a low credit score, the worst thing you can do is apply to the wrong lender. Getting rejected on your loan application can damage your credit score further. So it’s crucial to do your research.  

That’s where we come in. With over 100 lenders on our books, including specialist and alternative financing options, Commercial Loans can help you get the loan your business needs, even if you have a low credit score. 

Talk To The Commercial Loans Team Today

Low Doc Finance Details

Questions and Further Information

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admin@commercialloans.com.au

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1300 169 200

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