Low doc loans are an excellent option for those who can’t provide the necessary financial statements or tax returns that come up with being a business’ employee. However, you still need to be as prepared as possible with a thorough Business Activity Statement (BAS). This is vital to securing the loan you need.
What is a low doc loan?
A low doc loan is a personal loan available to those who cannot secure one through financial institutions due to fluctuating or hard-to-verify income. This makes it possible for individuals who don’t meet the strict lending requirements of banks to still secure loans. Borrowers do not need to supply much documentation in order to secure these loans.
How do I qualify for a low doc loan?
You need:
- An active Australian Business Number (minimum of six months old);
- A minimum deposit or equity worth 20 per cent of your loan;
- An accurate BAS.
What is a BAS?
A BAS is a form the Australian Tax Office (ATO) requires in order to check your tax responsibilities. The document is also used by lenders to check the financial health of a potential borrower and assess the risk in providing a loan.
Who needs one?
A BAS is an excellent option for individuals who can’t provide the normal documents to prove financial health, such as:
- Self-employed and SME owners;
- Seasonal workers;
- New migrants.
The importance of creating a thorough BAS
Thoroughly preparing your BAS is a must in order to minimise your risk of outright rejection for a low doc loan. Without the necessary preparation, you could find yourself set back months as you try to redo the mistakes you could have avoided the first time.
Double checking for mistakes, preparing explanations for income fluctuations and researching the kind of loan and repayment plan that you need is easier with the help of a specialist.
Working with a mortgage specialist
Why work with a specialist to ensure you have the right BAS? One word: expertise.
Redrock have a team with years of experience in preparing statements for individuals across a range of circumstances and businesses. We can work with your business to discuss the kind of low doc loan you need and develop a plan to help you secure your funds.
It’s tough for self-employed individuals in the lending world, especially when they can’t prove their financial health. Contact Redrock today to discuss how to prepare an BAS and give your application for a low doc loan the best chance possible.
