New business car finance are loans for motor vehicles for individuals starting a new venture and that do not have all the financials usually required by lenders. These types of loans can be in high demand at this time of year as many look to making that move to working for themselves from 1 July.
Is financial year 25/26 the time for you to make the move to working for yourself? Setting up as a contractor in your field? An owner-driver? Your own operation as a plumber, electrician, carpenter? Your own retail establishment, fitness or medical practice? In many industries, a business owner needs a motor vehicle and the financing to buy it.
Without at least a year’s worth of financial records, sourcing affordable financing as a start-up operator can be one of the biggest challenges of starting the business. But there are opportunities to secure workable vehicle loans through our specialist non-bank lenders. We cover off on what is required, what is involved and how we can assist.
What is new business car finance?
In applying for commercial credit products, businesses must provide financial documents on their operation, typically for at least the past 12 months, sometimes for a longer period. Financials refer to income tax returns, the annual accounts, bank statements, BAS returns, the asset and liability schedule, current turnover, and profit and loss statement. These are typically the minimum requirements set by banks and some other lenders. In addition, lenders may insist that the business has traded for at least 1-2 years and has a minimum turnover level.
New enterprises, some of which may not be yet actively trading, clearly will not have accrued these financial records. New business car loans are provided by specialist non-bank lenders and are approved based on minimal financials. These loans are known as ‘without financials’, ABN-only loans, Low Docs and No Docs loans.
These terms describe the category of application. They are not specific loan products. Businesses requiring this type of special approval may include sole traders, small companies and partnerships.
What is required for new business car finance?
The specific requirements for this type of loan approval can vary with different lenders. With our access to a large lender base, we support operators by identifying the lender with criteria in line with their current situation. While some lender criteria can vary, it is essential that the applicant has an ABN and identification, but registration for GST is not required.
Applicants will want to present as strong an application as possible to ensure the best possible loan offer is received. To do this, we advise they prepare what financials they can, based on any work which has been done, the plan for the operation, any contracts that have been secured, and similar documents.
Personal financials are usually required. Applicants should be prepared with their latest personal income tax return, their bank statements, and itemised lists of their debts and any personal assets. They can expect that their personal credit rating will also be checked.
Commercial vehicle loan products do allow for the vehicle to be the collateral for the loan. For many businesses, no additional security is required. For those just starting up, additional security is usually required. Operators can provide this collateral with other goods that they own or, subject to lender approval, cash reserves or a personal guarantee.
What new business car finance products are available?
As mentioned above, Low Docs and other terms refer to the application category not a type of loan. When approved, the Low Docs loan applicants may choose the type of commercial loan that is aligned with the method of accounting they are implementing and their approach to their balance sheet, tax and other key goals. Referring to an accountant is highly recommended.
Low Docs loans are available with Commercial Hire Purchase, Lease, and Chattel Mortgage. All offer tax deductions, fixed interest rates, fixed terms, and end of term lump sum payouts – balloons and residuals. Interest rates differ with commercial credit facilities. Low Docs loans typically involve a higher rate than the best rate that lenders will be offering.
To be prepared to purchase with the confidence that you have been approved for financing, new operators can take advantage of our pre-approved loan service. This involves applying for your loan before even deciding on the vehicle you want to purchase. We will source the best offer and process the application through to condition approval stage. Providing you with the amount you are approved to borrow and allowing a vehicle to be selected to suit the loan approved.
What vehicles can be purchased with new business finance?
All types of vehicles can be financed with Low Docs and No Docs loans. The loan amount approved may determine the price range if a deposit is not available. Tradies may consider a top-selling cab chassis such as the Ford Ranger or Toyota HiLux, owner-drivers and retailers a commercial van, and contractors in other fields such as IT and business services, a fuel-efficient city car such as the very popular Kia, Hyundai and Mazda models.
Whatever your industry, whatever vehicle you want to purchase, contact Jade Finance for new business car finance online or by phone 1300 000 008.
DISCLAIMER: NO LIABILITY IS ACCEPTED IF ERRORS OR MISREPRESENTATIONS ARE FOUND IN THIS ARTICLE. THE ARTICLE IS PREPARED AND PRESENTED FOR GENERAL INFORMATIVE PURPOSES AND IS NOT INTENDED TO BE THE SOLE SOURCE OF INFORMATION FOR MAKING FINANCIAL DECISIONS. THOSE REQUIRING GUIDANCE AND ADVICE SHOULD CONSULT A FINANCIAL ADVISOR.
