So you had great plans for making that bold move that many do, setting up your own business this year with your own piece or fleet of machinery and equipment. But once you started looking into the options for equipment finance for new businesses and especially sole traders, those plans are looking less possible. Not being able to meet the criteria for finance as set by some lenders can deter many individuals from proceeding with plans to set-up their own business.
These criteria can include the lack of all the documentation which is required to fully complete a typical business finance application. To assist new operators, Jade Equipment Finance provides access to cost-effective Low Doc and No Doc Equipment through specialist non-bank lenders. Finance which enables new operators to acquire the machinery and equipment required to establish their own business and work to achieving their self-employment goals.
This type of equipment finance may suit those looking to self-employment as a sole trader in many areas including construction, building, trades, landscaping, civil works, earthmoving, IT, digital industries, retail, beauty services, fitness and many others. Low doc and no doc loans are especially designed for those without the complete set of financial documentation required to meet the eligibility criteria as set by some lenders.
While some conditions may be attached to the loans that would not apply to established companies, this type of equipment finance can still be achieved at affordable interest rates and with workable terms.
No Doc Low Doc Equipment Finance
Exactly as the name implies, these loans require less or even no financial records or docs. The reference is to the operator or business owner that is making the finance application. Once the application is approved, the new operator has the choice of which particular finance product will best work for their set-up. More on those options below, first we cover the details of the No Doc and Low Doc application category.
Docs is a term used in the finance sector to refer to a wide range financial information about an individual or business. In regard to businesses, those docs include records such as the Business Activity Statements, the business tax return, the annual business accounts as prepared by the account, bank account statements, asset and liability statements and trading figures. New operators that have been operating for a short time may have accumulated some of these docs, while those in the initial set-up stages will likely have none or very few.
The amount of financial information or docs which can be included with the application can improve the application and as such, may lead to a cheaper interest rate equipment finance or more amenable conditions. Lenders may view this in a positive light.
What is definitely required by all No Doc and Low Doc applicants is to hold a current Australian Business Number (ABN) and present verifiable forms of identification. Having GST registration is not an essential requirement but may be viewed favourably by lenders. Businesses generating in excess of $75,000 pa must have GST registration.
Most applicants should expect that their personal financial position and credit rating will be reviewed and assessed when an application for this type of equipment finance is made. Those planning to set-up as a sole trader or as self-employed operator or contractor may enhance their finance application by addressing issues with their credit rating. Information on this can be obtained at Moneysmart.
Sourcing New Operator Equipment Finance
One of the major queries for new operators seeking equipment finance will be what finance companies or lenders actually offer loans to suit their circumstances. There are lenders that do offer this type of finance but often not directly to the business applicant. These types of what we refer to as non-bank lenders, are often difficult for business operators to find and in many cases, the lender does not offer finance directly to business owners. Instead, their business model is to work through a network of finance brokers, such as Jade Equipment Finance.
We have this arrangement, known as accreditation, with numerous non-bank lenders which allows us the access to their finance products for our customers. Contrary to what some new operators may think, utilising the services finance brokers is available to them and can deliver significant benefits. Benefits such as having professional experts to source and structure the equipment finance and negotiate the interest rate and any special finance conditions.
Equipment Finance Products
As mentioned above, after the new operator’s equipment finance application is approved, or even prior to applying, the business owner can decide which of the finance products will suit the acquisition and the business.
The choices include:-
- Equipment Leasing
- Chattel Mortgage
- Commercial Hire Purchase
- Rent to Own
There are a number of differences in these products which relate primarily to the structure of the business in regard to accounting practices. As such, we encourage our customers to refer to an accountant or their financial advisor to assist in the decision-making.
Plans for self-employment with your own machinery or equipment purchased with affordable equipment finance may be highly achievable with Low Doc No Doc finance. To discuss what the specific options may be for your individual circumstances, have a confidential discussion with one of our operators.
To explore equipment finance options for new operators, contact Jade Equipment Finance on 1300 000 003
DISCLAIMER: IF MISINTERPRETATIONS, MISREPRESENTATION OR ERRORS EXIST IN THIS ARTICLE, NO LIABILITY IS ACCEPTED. THE INFORMATION IS PROVIDED ONLY FOR GENERAL PURPOSES AND NOT IN ANY MANNER INTENDED AS THE ONLY SOURCE FOR MAKING FINANCIAL DECISIONS. THOSE THAT CONSIDER THEY REQUIRE ADDITIONAL GUIDANCE OR ADVICE SHOULD REFER TO AN INDEPENDENT FINANCIAL ADVISOR.
