To move on from the challenges of the past few pandemic years presents a number of options depending on individual circumstances. For those that want a totally new way to earn, that means setting up their own business by acquiring machinery or equipment to operate as a sole trader, owner-operator or contract out to large contractors. With a wealth of infrastructure projects currently at different stages of construction, there are many opportunities available. But new business operators will typically require no docs equipment loans to purchase the equipment to get their business started.
The decision to make the change to self-employment is admirable and exciting. But the logistics and practicality of the process is not always that exciting especially when it comes to getting loans. Sourcing cost-effective equipment finance for new businesses with no docs equipment loans can be achieved through specialist equipment lenders.
Jade Equipment Finance is such a specialist lender and we explain what is available to those setting up a new business and the services we can provide to assist new operators achieve workable equipment finance.
No Docs Loan Criteria
No docs and low docs are descriptions used for loan applicants and are not actual finance products in their own right. The reference to ‘docs’ is to the amount of financial documentation that the business applying for the loan can provide in their application.
When applying for equipment finance, lenders will typically require the business to provide a range of records or documents to validate the financial position and outlook. These records may include tax returns, BAS, the accounts for the past years, profit and loss statements, bank statements and similar documents.
Obviously a business that is in the initial phase of setting up won’t have accrued those records. Many operators will actually need the loan to purchase the equipment which will essentially become the business.
In addition to the financial records, some banks also require that a business has traded for a minimum period to be eligible for a standard business loan. The minimum period may be as small as 12 months but some stipulate as much as 24 months to be eligible. Once again, a clear impossibility for a new start-up.
No docs equipment loans have been explicitly structured to meet the needs of new businesses that do not meet the criteria for standard business loans set by many banks and other lenders. These loans are not available through all lending sources. Businesses requiring no docs finance will need to engage with a specialist lender such as Jade or a finance broker to access these loans.
There are some basic criteria to be eligible for no docs loans and they include:-
- ABN holder
- Verifiable identification
- Being registered for GST is not essential, but can be viewed favourably by some lenders
Small one-owner businesses may also have their personal finances assessed as part of the loan approval process. If in this category, business owners should address their personal credit rating and score and take steps to fix any errors which may appear on the report.
The difference between no docs and low docs is the amount of finance records etc that can be provided to support the application. Even simply-prepared income/expenses records may assist the application. A business plan may be requested and these can be quite simply prepared using templates which are readily available online.
No Docs Loan Products
Once a business has a loan application for no docs finance approved, they may select from the range of equipment finance products available to all businesses. Unless the lender stipulates the approval is for a specific loan type.
When selecting the type of loan, businesses should consider the full package of features and benefits in their context of their individual operation and objectives. As many of the features of finance products relate to accounting issues, it is strongly advised that a new business connect or consult with a bookkeeper or accountant to assist. Jade Equipment Finance consultants will handle the finance sourcing, application and settlement process but it is not our role to advise customers on finance product selection relevant to their needs.
No docs equipment loan types include:-
- Equipment Leasing
- Equipment Rental or Rent to Buy
- Chattel Mortgage or Equipment Loan
- Hire Purchase or Commercial Hire Purchase
Applying for No Docs Equipment Loans
The process for applying for No Docs Equipment Loans is the same as for standard, fully documented business loans. Contact us to brief our consultants on your requirements or connect via our online channels. Pre-approved no docs loans are available and these can be extremely beneficial. Allowing new businesses to know they have the finance approved prior to discussing equipment acquisitions with dealers.
If it’s new in ’22 for your business, connect with Jade Equipment Finance to discuss no docs equipment loans to get you started.
To discuss no docs equipment finance, speak with a Jade Equipment Finance consultant 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.