Low doc loans can offer a quick financial fix for your problems without having to go through all the bureaucracy required by other loans. At a price, of course. In this article, we discuss how low doc loans for the self-employed can be a great option for you.
As the name suggests, low doc loans don’t require too many documents. This can come in handy especially if you are self-employed and need to present more papers than usual; papers that are normally quite difficult to get a hold of. It is important to know that this kind of loan is only ideal for self-employed borrowers. The reason why such a loan was created is that these people can almost never prove their actual income since their pay might rarely be regular or consistent.
Low doc loans are available in Australia at the most important financial institutions, but they are also offered by smaller banks and other alternative lenders.
So, let’s see how low doc loans can help the self-employed and discuss whether or not they are worth your time.
What Documents Do I Need for Such a Loan?
When you want to apply for low doc loans, your lender will require your ABN, your business activity statements for the last twelve months or so. In addition to that, he/she will request proof that you have been working in the same industry for a minimum period that varies from a lender to another. You will also need to present your registered business name and a signed borrower’s income declaration. And that’s all. You can finally say goodbye to bureaucracy. Flexibility is key when it comes to this specific loan.
The lenders will take into consideration the income they calculated with your BAS or the smallest income provided by you in the low doc declaration.
What’s the Catch?
Well, for low doc loans you do have the advantage of providing less documentation than you would with other loans, but… There is always a “but.” These loans have a higher interest rate than your standard loan. So, you have to work less to get this special loan, but you will pay more in the form of interest rates. We recommend getting the best of both worlds and shop for the best low doc loan you can find. Doing a little bit of extra research now might save you a lot of money later.
If you find a low doc loan with a low-interest rate, consider yourself lucky. Don’t expect to find interest rates similar to standard loans, though. However, you may try talking to us at the Australian Lending Centre. We have a few great low-doc loan options even for those who are stuck in a peculiar situation. You’ll most likely find our advice constructive and our offers quite attractive.
How Can Such a Loan Benefit My Business Needs?
When you run a business, no matter how small, the chances are that you can’t afford to spend your time looking for all the documents necessary for the loan. You will most probably get your secretary or other employees do it for you. So, you won’t necessarily feel how time-consuming this step is.
But you are self-employed, so you will have to spend a lot of time running from place to place to get your complete documentation ready. So instead of applying for a standard loan, you can save some time, avoid stress and apply for low doc loans. This means no more fooling around with business documents.
You can do plenty of things with a low doc loan; you can finance your company car, equipment, pay your employees, buy products for your store (if that’s your business) and so on. Investing in your business means that you will be able to produce more and at a better quality. The idea is that you will get a decent sum without wasting too much time like you would with a regular loan.
Some lenders can give you a loan that values somewhere around two hundred thousand dollars. With that kind of money, you can cover most of your expenses not only as a self-employed person but also as a businessman who owns a small company.
If you are self-employed and looking to apply for low doc loans, then the next step is to look for the right lender for you. You might have to do some calls here and there and spend some time searching the Internet, but finding the best deal can help you and your business in the long run.
So, are low doc loans worth your time and can they help your business improve? The answer is “yes.” Still, before you apply for low doc loans, you can search for other alternatives, so you won’t have to deal with high-interest rates, but still bring that boost to your company. On the other hand, if you manage to find a lender with low-interest rates, you should consider yourself lucky and take full advantage of this opportunity.