If your business doesn’t fall into that category – or if you need to move fast or simply don’t want the hassle of preparing such extensive documentation, don’t despair…
There’s an alternative: the low doc loan.
Also known as an unsecured business loan, this form of business finance is easily accessible to most established businesses in Australia, including those who are self-employed and have very little chance of securing bank finance.
In fact, there is a booming alternative finance market, with lenders offering fast cash to businesses of all shapes and sizes.
If you’re still in the start-up phase you’ll probably have to look elsewhere for funding (consider peer-to-peer lending, crowdfunding or angel investors), but if you’ve been trading for at least six months there’s a good chance you’ll be able to access a low doc unsecured business loan.
You’ll still need to meet the lender’s basic criteria, the most important of which is capacity – i.e., your ability to service your loan repayment obligations. This is for your protection as well as the lenders’ – they need to recoup their investment, with interest, while you need to keep your business solvent.
To apply for a low doc unsecured loan, you’ll still need some supporting documentation, but far, far less than for ‘full doc’ bank finance. Prepare yourself with:
- Your bank statements for the last six months.
- Proof that you meet the lender’s minimum turnover requirements.
- Your credit sales / merchant statements for the last four to six months.
- Proof that you have been operating for the lender’s minimum required period.
- Personal identification documents.
You may be asked to provide a personal guarantee for your unsecured business loan, so you may also need to provide evidence of your personal income such as your latest tax return.
Expect the lender to check both your business and personal credit ratings – although a poor credit rating need not be a barrier provided you are willing to pay more for your finance.