Last Updated: 31st May, 2021

Do you need equipment finance to purchase machinery, motor vehicles or other equipment for your day-to-day operations?

If you can’t provide up-to-date financials, or your income evidence does not accurately reflect your financial position, low doc equipment finance may be the solution for you.

How much can I borrow?

  • Borrow up to 70% of the property value: You must have available equity in a residential property or standard commercial property.
  • Max loan term: 7 years (exceptions apply to strong borrowers).
  • You can generally borrow up to $100,000 (higher amounts available for low risk borrowers).
  • Alternative business financials can be considered.
  • You need a clear credit file.
  • You need a business loan proposal that details the purpose of the equipment finance.

Call us on 1300 889 743 or fill in our free assessment form and you’ll be put in touch with one of our experienced business loan specialists.

We can discuss your equipment finance needs and recommend low doc solutions that are right for you.

How do I get approved?

With a traditional equipment finance loan, you’ll generally need to provide proof of your cash flow position with your last two years personal and business tax returns, and Business Activity Statements (BAS).

These statements should show that your business income has increased or at least remained stable year-on-year.

However, for new business owners (less than 2 years ABN) or businesses that have gone through an unprofitable period, providing complete financials may not always be possible.

With low doc equipment finance, you can instead provide a combination of the following alternative income evidence (alt docs):

  • A signed income declaration statement (witnessed by a JP).
  • An accountant’s letter and accountant-prepared income forecast.
  • Interim financials.
  • Older tax returns.

How do I improve my chances of approval?

Acceptable security property

One of the common reasons business owners get declined for low doc equipment finance is because of the property they use as security.

Most lenders prefer standard residential properties in metro or semi-metro locations (low-risk postcodes).

In some cases, lenders will also consider the standard commercial property from which you operate such as a warehouse, factory, storage unit or office space.

Banks are risk-averse and want to know they can easily sell your property should you default on your equipment loan.

Specialised properties or residential properties in certain locations can be difficult to sell because there is a smaller market of buyers.

Running a profitable business

Banks will not lend to an unprofitable business.

If it is simply a matter of being behind on your financials but you can prove your profitability with limited or alternative income evidence, we can help you build a strong case.

Of course, there can be some grey when running a business and, in industries like manufacturing or agriculture, it’s not uncommon to have unprofitable months.

Financials that can show long-term profitability and evidence that you’ve taken measures to improve cash flow can be taken into account in your equipment finance application.

These measures can include reducing your overheads, switching to a cheaper supplier or distributor, or cutting unprofitable products or services.

Adding back expenses

Speak to your accountant about what add backs you can include in your income in order to improve your borrowing power.

Business expenses aren’t “real” expenses, especially if they’re fixed or ongoing costs.

For example, the following expenses can typically be added back:

  • Extra superannuation contributions.
  • Losses carried forward from prior years.
  • Negative gearing deductions from your investment properties.
  • One-off expenses such as moving your business.
  • Trust distributions to family members for tax purposes.
  • Depreciation of our equipment and other assets like a company car.

Equipment finance solutions

There are different equipment finance options depending on your needs and how you manage your business financials.

These options include:

  • Finance lease.
  • Commercial hire purchase.
  • Novated lease.
  • Chattel mortgage.
  • Sale and hireback or sale and leaseback.

You can learn more about these options on the equipment finance page.

What kind of equipment can we help finance?

We can help you finance such standard equipment and machinery as:

However, we can also assist with specialised equipment for technical industries as long as there is a secondary market.

This type of equipment includes medical equipment, and equipment and machinery for engineering and building-related industries.

Will I pay a higher interest rate?

You may pay a slightly higher fee with low doc equipment finance because commercial loans are, by nature, rate for risk.

In saying that, commercial and business loans are unregulated so there is more room to move on price.

Our experienced business brokers can often negotiate a competitive interest rate with a relationship manager but the key is choosing the right lender.

It’s best to call us on 1300 889 743 or fill in our online enquiry form to find out if you qualify for low doc equipment finance and what pricing may be available to you.