Low doc business loans: how they work and who they suit

A low doc business loan is a business loan where the lender accepts other evidence of your income, such as BAS statements and business bank statements, instead of full tax returns and financial statements. It's often searched for by sole traders and small business owners whose tax returns are behind, or whose last return doesn't show how the business is trading today. This guide explains what low doc means, who it may suit, what lenders may ask for instead, how it compares with full doc, and how a broker can help.

What is a low doc business loan?

A low doc (low documentation) business loan is finance for self employed people and businesses who can't easily provide the full financial records a standard loan needs. Instead of recent tax returns and accountant prepared financials, the lender looks at other evidence of income, such as BAS statements, business bank statements and a signed income declaration. The lender still assesses whether you can afford the repayments, just using different paperwork.

"Low doc" means less documentation, not no documentation. You'll still need to show who you are, that your business is trading, and that the loan is affordable. "No doc" loans, where a lender asks for almost nothing, are rare, and they're not the same thing.

Low doc loans are mainly offered by non-bank and specialist lenders, and what each one accepts can differ. That's why comparing lenders is worth it: a broker can match your paperwork to the lenders whose low doc criteria suit it.

Who low doc loans may suit

Low doc lending isn't for everyone, but it may suit:

• Sole traders and self employed people whose tax returns are behind. Your business is trading well, but this year's return hasn't been lodged yet.
• Businesses whose last tax return doesn't reflect current trading. For example, you've grown quickly since your last return, or you've had a tough year that's now behind you.
• Newer businesses with some trading history. Some lenders consider businesses that haven't been operating long enough to have a full set of financials. How much trading history a lender wants varies from lender to lender.
• Business owners who'd rather keep things simple. If your BAS and bank statements tell a clear story, a low doc loan may be a practical option.

Every lender sets its own criteria, and being in one of these groups doesn't mean a lender will approve you. It means some lenders consider applications like yours.

What documents lenders may ask for instead

Each lender has its own list, but a low doc application commonly includes:

A checklist to keep handy

• Photo ID, such as a driver licence or passport
• Your ABN, and your GST registration details
• Recent BAS statements
• Recent business bank statements, often covering several months
• A signed income declaration, and in some cases a letter from your accountant
• Details of what you own and what you owe, such as property, vehicles, credit cards and other loans
• For an asset purchase, the supplier's quote or invoice

Your broker will confirm what your chosen lender actually needs, so you're not chasing paperwork you don't need.

Low doc and full doc: how they compare

Low doc gives you another way to borrow when your paperwork doesn't tell the whole story. It's worth seeing it side by side with a full doc option, because each lender sets its own terms.

• Pricing is set by the lender. Each lender prices a low doc loan on the information it has, so comparing a few options matters.
• Loan size and security vary. Some lenders cap the amount or look for security, such as the asset being financed. Others are more flexible.
• Not every lender offers low doc. That's where a broker helps: we know which lenders on our panel consider it.
• Up to date tax returns can widen your options. If lodging outstanding returns is on the cards, a full doc loan may open up too. Your accountant can tell you how long that would take.

The right choice depends on your situation. We can show you what's available both ways, so you can compare and decide.

Types of business finance available on a low doc basis

Where available, some lenders offer low doc versions of:

• Business loans, both secured and unsecured, for working capital, cash flow or growth. See our business loans and unsecured business loans pages.
• Equipment finance, for utes, trucks, machinery and tools. See equipment finance.
• Vehicle finance, including car loans for self employed people. Our guide to what you need for a car loan when you're self employed covers low doc car loans in more detail.
• Lines of credit, where a lender offers them.

With equipment and vehicle finance, the asset you're buying is usually the lender's security, which can make a low doc application easier to assess than an unsecured loan.

How to make a low doc application smoother

A few things help any low doc application:

• Keep your BAS lodged and up to date. For many low doc lenders, your BAS is the main evidence of income.
• Keep business and personal banking separate. Clear business bank statements make it easier for a lender to see how your business is trading.
• Have your supplier quote or invoice ready. If you're buying a ute, a truck or a machine, the lender will want the details.
• Be upfront about your credit history. If you've had credit issues in the past, tell us early. Some lenders consider past credit issues, so we may be able to help, but approval isn't guaranteed.
• Don't apply with lots of lenders at once. Each application can be recorded as an enquiry on your credit file. Talking to a broker first lets you compare options before anything is submitted.

How a broker helps with low doc lending

Low doc criteria differ a lot between lenders. One lender might accept BAS statements and bank statements, while another wants an accountant's letter or more trading history. Applying to the wrong lender can mean a decline and another enquiry on your credit file.

A broker's job is to know which lenders accept which documents, so you apply once, to a lender whose criteria suit your situation. At LetMe Finance, we look at your whole situation, explain your options in plain English, and handle the application with the lender for you.

Enquiring with us has no impact on your credit score. That applies to the enquiry only: a full application to a lender will involve a credit check. Read more about our business loans, or start a business loan quote.

Common questions

Can I get a low doc loan with a new ABN?

It depends on the lender. Many lenders prefer a business with some trading history, but some lenders consider newer ABNs, particularly if you've worked in the same industry before or can show steady income through your business bank statements. We may be able to help, but every application is assessed by the lender.

Do I need property as security?

Not always. For equipment and vehicle finance, the asset you're buying is usually the security. For larger business loans, some lenders may ask for property or other security. Requirements vary between lenders and loan types.

How is a low doc loan priced?

Each lender sets its own pricing and conditions for low doc loans, based on the information it has and your situation. That's why it's worth comparing a few options, low doc and full doc, before you decide. We lay them out side by side for you.

Can I get low doc equipment finance?

Often, yes. Some lenders offer low doc options for equipment such as utes, trucks and machinery, where the equipment is the security for the loan. The lender will still look at the equipment itself, your business and your ability to repay. See our equipment finance page for more.

Talk to us about your situation

If your tax returns are behind or don't reflect how your business is trading now, get in touch and we'll talk through what may be available.

This guide is general information only and doesn't take into account your objectives, financial situation or needs. All applications are subject to lender assessment and approval. For tax and accounting questions, speak with your accountant.