Did you know that you can buy or refinance a commercial property without providing any income evidence?
There are fewer regulations for commercial loans which means the banks are not required by law to verify your income. This allows people with a complex or outside of the box situation to invest in commercial property without any hassles.
How much can I borrow?
So how much can you borrow without proving your income?
- You can borrow up to 65% of the property value.
- No income evidence is required.
- Investment properties are preferred.
- Offices, warehouses, factories or retail properties in capital cities are preferred.
- You may qualify even if you have a bad credit history.
Speak to our mortgage brokers by calling 1300 889 743 or fill in our free assessment form to find out if you qualify for a no doc commercial loan.
How does a no doc commercial loan work?
This type of loan is known as an asset lend because the lender is primarily relying on the value and saleability of the security rather than the strength of your personal situation.
You will need to sign a declaration confirming that you are aware of the repayments and can afford them. You are not normally required to state your income but if you can then you may qualify for a more attractive interest rate.
You are not normally required to provide supporting documents such as tax returns, business activity statements (BAS), an accountant’s letter or business bank statements. You may still need to provide other documents such as statements for your existing commercial loan, evidence of your deposit or the particulars of the lease for the property.
You can use the funds from the loan for commercial property investment purposes, investment in shares or for business purposes including working capital.
You cannot use the funds for personal purposes or to buy residential investment properties because the loan would then be regulated under the National Consumer Credit Protection Act (NCCP). If the loan is regulated then the lender must verify your income.
Does my credit history matter?
Some lenders will investigate your credit history while others will not. As a general rule, if you have a better credit history then you can obtain a better interest rate from a mainstream lender.
Is my property acceptable security?
No doc commercial loans are only available for prime security properties. Acceptable properties include:
- Capital cities and major regional locations.
- Unspecialised properties such as offices, factories, warehouses and retail properties.
- Commercial, industrial or mixed-use zoning.
- Investment properties with a current lease in place are preferred.
- Readily saleable and in a good condition.
Unacceptable properties include:
- Remote locations.
- Specialised properties such as hotels, petrol stations and day care centres.
- Residentially zoned properties
- Properties that are occupied by your business (case by case).
- Properties in a poor condition.
Not sure whether your property will be accepted as security for a loan? Call us on 1300 889 743 or fill in our free assessment form to find out if you qualify for a commercial no doc loan.
Most no doc loans with a private lender have a short term of 6 months to 12 months whereas with larger specialist lenders most terms are for 1 to 5 years. A couple of our lenders can consider terms of 15 to 25 years.
You can often rollover your loan at the end of the term which is where the lender re-approves your loan and extends the term subject to their credit criteria, fees and charges.
There are no annual reviews for no doc loans.
Commercial no doc interest rates
No doc commercial loans are typically 3-4% higher than what we can obtain through our most competitive lenders.
The pricing is variable based on the lenders that you qualify with, your credit history, the percentage of the property value that you borrow and the overall risk of your application.
Which lenders can help?
Specialist lenders such as non-bank and private lenders provide the majority of no doc loans.
In some cases, we are able to provide some form of limited income evidence to a major bank to get a lower priced loan, even though the customer thought that they could only qualify for a no doc loan.
Be careful of exit fees
Commercial loans are not regulated under the NCCP act so there is very little consumer protection for you as a borrower. Lenders are permitted to charge exit fees and in many cases these can be extortionate.
We recommend that you work with our mortgage brokers to formalise an exit strategy to repay or refinance the loan at the end of the term. Always ask a lender what the exit fees are when seeking a quote for a no doc loan.
Apply for a no doc commercial loan
Do you need help to apply for a no doc loan on your commercial property?
Call us on 1300 889 743 or fill in our free assessment form and we’ll get back to you with a quote for a no doc loan.