Fast, Easy Loans for Business Owners
Running your own self employed business and buying a home can be hard at times. When you are self employed, there is a lot to consider and it can be difficult to get approval for a traditional home loan. This is where a low doc loan can be the right choice for you requiring minimal paperwork and a faster process for your low doc loans. Talk to the experts at Oyster Hub to find the best low doc loan for you.
How Does Low Doc Loans Work?
Why choose Oyster Hub Self Employed Loans?
We are accredited with most reputable lenders in Australia giving you a fair choice to compare
What Is Required in Self Employed Low Doc Loans?
This is the only way that you can borrow without recent tax returns or financial statements.
Alternative income verification
One year’s tax returns
Some of our lenders do not need two years tax returns or financial statements to approve your low doc loan.
This is great news for people who have a new business or are self employed which had a low profit in the first year or for businesses which had a one off bad year, which may have previously hindered your ability to attain approval.
You will need to provide:
- The last years’ financial statements (Profit & loss and balance sheet).
- The last years’ business tax returns.
- The last years’ personal tax returns.
- The last years’ notices of assessment.
At Oyster Hub, we offer both types of loans and you can compare our range of variable-rate mortgages to find the best fit for you.
The following details are normally required on the accountant’s letter:
- The declaration must be signed by a fully qualified accountant who can confirm that your annual net income is honest and correct.
- Must be on the accountant’s letterhead. If it is a low doc declaration, the banks have specific forms for the accountant to complete instead of a letter.
- Must show the accountant’s full details including ABN, address and phone number to confirm integrity of the accountant.
- Letter must be signed and dated accordingly.
- The accountant should specify how long they have acted on behalf of the borrower.
- The accountant should also mention that the current financials are not available, but based on their knowledge of the client’s current circumstances, the figure is not an unreasonable estimation of their annual gross income.
- The taxable income the borrower is earning.
- A disclaimer to protect the accountant.
The Business Activity Statement (BAS) was introduced in 2000 by the Australian Tax Government as a way for businesses to report their GST and PAYG withholding tax obligations.
Due to the Global Financial Crisis (GFC) in 2008 and the introduction of the NCCP Act in 2010, it became a requirement for lenders to obtain some verification of your income for a low doc loan.
The idea behind using BAS statements was to allow lenders to verify a client’s turnover and decrease the risk that comes with low doc loans to ensure cases of non-repayments do not happen again.
Most lenders require ABN and GST registration for a minimum of two years, however one lender requires only one year.
Most lenders require 12 months’ BAS, however some of our lenders can accept only one or two Business Activity Statements to assess your income.
Your credit history must be clear of any adverse listings and your debts must be paid on time. Some exceptions are available.
If you’re borrowing over 60% of the property value (LVR) you may have to prove genuine savings.
The specific criteria will vary depending on which lender we help you apply with. However, as a general rule the following criteria will apply:
- Employment: You must be self employed.
- ABN: Must have been registered for 12 months.
- GST: Must have been registered for 6 months.
- Statements: You must provide 3 – 6 months statements depending on the lender.
- Loan amount: You can borrow up to 80% of the value of your property.
- Credit history: Minor adverse credit history can be considered.
- Property: The security property must be in a good location and good condition.
Consider providing BAS statements or an accountant’s letter as evidence of your income, if you are unable to meet the above requirements.