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  • Writer's pictureColin Green

What Is A Low Doc Business Loan?

When it comes to business growth and development securing finance can be pivotal to success or failure. However, if you’re starting a new business or you’re self-employed and looking for finance to grow your business, you might find your options a little more limited than larger or more well-established operators. That’s because traditional lending avenues often rely on previous financial records and proof of income to determine your suitability for a loan. That’s where a Low Doc Business Loan can bridge the gap and offer a more accessible route to funding. If you've established your business and are looking to grow, or you're an entrepreneur looking to buy another business, a Low Doc Business Loan could be the game changer you need.


low doc business loan application with spectacles and a calculator

What Is A Low Doc Loan?

As the name suggests, a Low Doc Loan is finance that is secured when you don’t have the documents usually required to obtain funding such as financial statements and tax returns.


Low Doc business loans are specifically tailored for business owners with a relatively short operating history, who are unable to provide the financial records from the previous 2 years and proof of income usually demanded by lenders. This situation is common among freelancers, small business owners, or those who have not been in business long enough to have extensive financial history.


A Low Doc Business Loan is used when you don’t meet the qualifying criteria for a traditional business loan because you cannot provide financial statements and business tax returns from the last two but you can provide some documentation.


Key Features and Benefits Of A Low Doc Business Loan

The benefits of a low doc business loan for certain types of business are hard to ignore. Simplified paperwork, fast approval and competitive rates are just some of the reasons low doc loans are seen as a viable and attractive option for small business owners seeking business finance with greater ease and less bureaucracy. Let’s take a look at some of the features and benefits of this type of finance in a bit more detail.

  • Simplified Application Process: Low doc loans require fewer documents and less paperwork compared to traditional loans, which can be beneficial for business owners who may not have detailed financial records or a long business history.

  • Faster Approval and Funding: Due to the reduced documentation requirements, the approval process for low doc loans is typically quicker, which means businesses can access funds faster to meet immediate needs or take advantage of timely opportunities.

  • Solution for Self-Employed and Freelancers: Self-employed individuals and freelancers, who might have irregular income streams and unconventional financial documentation, can find low doc loans more accessible than traditional business loans.

  • Flexible Use of Funds: Low doc loans often come with fewer restrictions on how the loan amount can be used, allowing business owners to allocate funds according to their most pressing needs, whether it's for working capital, equipment financing, or expansion.


Some Key Considerations Before Applying

It's important to note that while Low Doc Loans offer lots of benefits for business owners, there are a number of important factors to consider before proceeding with this type of finance. These include:

  • Interest Rates: Low Doc loans may come with higher interest rates compared to traditional loans, compensating for the lender's increased risk due to the lack of extensive documentation.

  • Lending Criteria: While documentation requirements are less stringent, you still need to meet specific criteria set by the lender, which may include a minimum business operation period or a good credit score.

  • Loan Terms: Terms can vary widely among lenders, so it's crucial to understand the duration, repayment structure, and any potential fees or penalties.


Who Is Eligible For A Low Doc Loan?

While the criteria that determines eligibility for a low doc loan will vary between lenders, generally you will need to be and Australian citizen or permanent resident, over the age of 18 and demonstrate:

  • Business Ownership: show that you own a business and have a valid Australian Business Number (ABN)

  • Proof of Income: While traditional proof of income may not be needed, low doc loans still require some evidence of income or business activity. This can be through bank statements, Business Activity Statements (BAS), or an accountant’s letter providing an estimate of your annual income.


What Can Low Doc Loans Be Used For?

Low doc loans can be used for a variety of business purposes, including but not limited to:

  • Cash Flow Management: To cover short-term cash flow shortages, helping businesses start up or continue operations without interruption.

  • Equipment Purchase: To finance the purchase of new equipment or machinery necessary for business startup, expansion or efficiency improvement.

  • Inventory Purchase: To buy stock in bulk, especially useful for businesses that experience seasonal fluctuations in sales.

  • Business Expansion: To fund the expansion of business operations, such as opening new locations, marketing initiatives, or product line extensions.

  • Working Capital: To provide working capital for day-to-day business operations, including paying wages, rent, and other operational expenses.

  • Debt Consolidation: To consolidate business debts into a single loan with potentially lower interest rates and more favorable terms.

  • Emergency Expenses: To cover unexpected business-related expenses, such as repairs for essential equipment or to recover from natural disasters.


Is a Low Doc Business Loan Right for You?

Low Doc business loans are a flexible financing solution that can help overcome the traditional barriers to business lending. They are particularly suited for entrepreneurs who have a solid business case but lack the formal documentation usually required. As with any financial commitment, it's essential to carefully consider the terms and ensure the loan aligns with your business goals and repayment capacity.


For business owners looking to expand, buy another business or start from scratch, a Low Doc business loan could provide the financial support needed to propel your ambitions into reality. Always consult with a financial advisor or loan specialist to explore your options and make an informed decision tailored to your business's unique needs and circumstances.


At CJG Finance we help make the process of securing business funding as easy as possible. With so many lenders and products on the market, our expert business loan broker can help you work out just what you need and then find lenders who fit your goals. Whether you’re just starting a new business or looking to grow and expand an established enterprise, we can help you find a loan that is best suited to your needs.


We maintain strong relationships with a variety of business lenders and Colin works with clients to find tailored business finance solutions that suit their financial position and goals. We do the hard work of finding you the best terms and rates so that you can get on with growing your business.



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