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Everything you need to know about Low DOC Commercial Loans

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Commercial Loan

Low DOC Commercial Loans are those loans that are used by business owners who lack sufficient documentation to prove their income. With the help of this type of loan, you can access the funds faster, and you can easily increase the profits of your business and clear all your debts. Some important facts relating to Low DOC Commercial Loans in Australia are:

What are the documents needed for Low Doc Commercial Loans?

In the case of many startups and small businesses because of the limited working capital of the company, the owners lack sufficient documentation to prove their income. Moreover, some financial statements also come out to be complex where it is difficult to verify the income. In such cases, where you are unable to prove your income with proper financial statements, Low DOC Commercial Loans will be beneficial for you because it requires less documentation.

For the approval of low doc commercial loan in Australia, you need to have ABN registration and also you have to sign an income declaration which will provide the current status of your income. Along with ABN registration and income declaration, you may need to provide some additional documents like:

  • A letter by an accountant
  • Statements of BAS
  • Bank account statements
  • A copy of the commercial lease agreement that shows your rental status
  • In some cases, income evidence is at all required

What can be your alternative documents for Income Verification?

For low doc commercial loans in Australia, you can use profit forecasts or interim financial statements as alternative forms of income verification. In this regard, you can project your past business growth or show increased turnover by moving your business to new premises.

If the strength of your previous year’s income is not enough to prove that you can afford a loan, then the interim financial statements of your business covering half of the financial year will help you to get the low doc commercial loans. In this case, you can discuss your requirements with the private lenders or banks and they will help you to get the low doc commercial loans.

low doc commercial loans
low doc commercial loans

Is it possible to refinance the property with a Low Doc Commercial Loan?

With some few selected lenders in Australia, you can have the possibility to refinance a commercial property by using a low doc commercial loan. But if the lenders find that your business is going to decline after some time, and then they will immediately refuse your application. They will favour those applicants who are able to release more equity to invest in their business and buy more properties. Since these loans have low-risk factors, therefore the lenders prefer to finance in the purchase of more commercial properties.

Which types of commercial properties are accepted in Low Doc Commercial Loan?

Low doc commercial loan accepts both non-specialized and specialized properties. Non-specialized properties such as retail shops, offices, warehouses or residential property are accepted. Specialized properties are considered on a case by case basis because they may tend to drop their value if the business is not running profitably.

What are the Interest Rates?

In Australia, you can select a bank that has a low doc margin and normal commercial loan interest rates. Moreover, if you have a large deposit, then some lenders in Australia will provide you with the same rate as their normal commercial loans. Plus, you can also secure your loan with collateral and reduce your interest rate.

Before applying for low doc commercial loans, compare your situation with the lenders’ policies and then decide which one will best suit you.

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