Last Updated: 22nd December, 2022

Can you still apply for a commercial loan if you don’t have the financial documents required by the banks?

Low doc commercial loans for self employed borrowers and professional investors are available from a variety of specialist lenders.

Avoid providing the paperwork that the banks normally need and still get a competitive interest rate.

How much can I borrow?

If you are buying a commercial property:

  • Borrow up to 80% of the purchase price.
  • Borrow up to 65% of the purchase price with reduced interest rates.
  • Borrow up to 80% of the value of any other properties that you own (including residential).

If you are refinancing a commercial property:

  • Borrow up to 80% of the property value.
  • Borrow up to 100% of the value of any residential properties that you own (the loan must be for business purposes).

Call us on 1300 889 743 or fill in our free assessment form and we’ll let you know if you can qualify for a low doc loan.

What documents do I need to provide?

Most low doc commercial loans are used by a business owners when they buy their business premises from their landlord. When the opportunity to buy your property comes along, you may not be ready with the required documents.

A low doc loan can solve this dilemma. These types of loans are specifically designed for self employed borrowers who cannot provide full financials such as tax returns or financial statements.

In most cases, you’ll need to have a registered ABN and you’ll need to sign an income declaration which confirms your current income.

In addition to this, you may need to provide additional documents:

  • An accountant’s letter
  • BAS statements
  • Bank account statements
  • A copy of the commercial lease agreement or your rental history
  • In some cases no income evidence is required

Can I use forecasts or interim financials?

You may be able to use the following documents as alternative forms of income verification but it’s not always straightforward.

Profit forecasts based on projecting past business growth or increased turnover from moving your business to a new premises are often accepted by some of our banks as a full doc loan rather than a low doc loan. That means you can borrow more and get an interest rate that’s a little bit sharper.

Interim financial statements for your business that cover at least half of the financial year give a lot of strength to your application if your previous years incomes weren’t strong enough to prove that you could afford the loan. The more evidence that you can provide, the easier it will be for our brokers to build a strong case to one of our banks.

In some cases, one of our lenders will allow you to pre-pay interest which can add strength to a full doc application. This is on a case by case basis and only works if you have a large enough deposit to pay the interest a year in advance.

Did you know our mortgage brokers are credit specialists, not salesmen? Give us a call on 1300 889 743 or fill in our free assessment form and we’ll let you know how we can help.

Low doc, lease doc or no doc?

The loan type that you need will depend on the documents you can provide to prove your income.

A full doc loan is used if you can prove your income in full. This usually means providing the last two years tax returns if you are self employed or payslips if you are employed.

A low doc loan is used if you are self employed and cannot provide financial statements or tax returns for your business.

A lease doc loan is used by commercial property investors who are using the income from their lease to confirm they can afford the loan. Often this option is chosen because of the complexity of their situation.

A no doc loan is used if you have no income evidence available at all. These are more expensive so we only use them as a last resort.

Can I refinance with a low doc loan?

Lenders obviously prefer to finance the purchase of commercial properties as these loans tend to have the lowest risk.

However, with a few select lenders, it is possible to refinance a commercial property using a low doc loan.

Lenders tend to favour applicants who are releasing equity to buy more properties or invest in their business rather than applicants who are borrowing to cover cash flow shortages. If they see signs that your business is in decline then they will refuse your application.

Speak to our specialist mortgage brokers by calling 1300 889 743 or by filling in our free assessment form and we’ll let you know how we can help.

Which commercial properties are accepted?

Non-specialised properties such as shop fronts, warehouses, retail shops, offices, factories or residential property are all acceptable.

Specialised commercial properties are more difficult to sell and tend to drop in value if the business occupying them isn’t running profitably. For this reason they are considered on a case by case basis only.

Are long loan terms available?

Yes, longer loan terms are available.

No doc loans typically have a short term but low doc loans can be for 15 to 25 years depending on the lender.

Larger commercial loans with specialised security properties will require annual reviews. Smaller loans with regular properties tend to have set and forget facilities.

Commercial low doc interest rates

Your interest rate will depend on the size of your deposit, the overall risk of your situation and the documents that you can provide as alternate income evidence.

If you have a relatively low risk loan then we can apply with a bank which has a low doc margin added to their normal commercial loan interest rates.

Some of our other lenders will give you the same rate as their normal commercial loans as long as you have a large deposit (i.e. a low LVR).

A few of our lenders offer fixed rates and interest only periods with their low doc loans.

Which banks can I use?

Occasionally we can get a low doc loan approved with a major bank as an exception to policy. However, second tier banks (not major banks) often have better pricing and more flexible credit criteria for low doc commercial loans.

Specialist lenders are available for high LVR loans or if you have a bad credit history.

Each lender has their own policies, will accept different documents and will prefer to either buy in your individual, company, trust or business name. It all depends on your situation!

Apply for a low doc commercial loan

Is your mortgage broker an expert? Many of our mortgage brokers have worked for in the credit departments of banks as the person actually approving or declining loans. We also have some brokers with significant experience in financing large commercial transactions.

We’ll compare your situation to our lenders’ policies and then present you with a comparison of several commercial loans so that you can decide which lender is best for you.

Call us on 1300 889 743 or fill in our free assessment form to find out where you stand.