What documents do I need to get a low doc commercial loan?

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Chekhov
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Joined: Mon Jul 15, 2013 5:49 pm

What documents do I need to get a low doc commercial loan?

Post by Chekhov »

Hi there, I was planning on getting a commercial loan but I don’t think I’ll be able to provide all of my financials. My friends suggested me that a low doc loan may be the right option for me and advised me to enquire on this forum. I want to know if I can take out such a commercial loan. Can anyone help me understand this?

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Otto Dargan
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Re: What documents do I need to get a low doc commercial loa

Post by Otto Dargan »

Hello Chekhov. Welcome to the forums.

A low doc commercial loan will not require you to provide full financials such as tax returns or financial statements. However, you will need to have a registered Australian Business Number (ABN) and sign an income declaration which confirms your current income.

You may also need to provide additional documents such as:
  • An accountant’s letter.
  • Business Activity Statements.
  • Bank account statements.
  • A copy of the commercial lease agreement or your rental history.
You may also be allowed to provide forecasts or interim financial statements as alternative forms of income verification. However, it should be noted that some lenders may not accept them.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

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Chekhov
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Joined: Mon Jul 15, 2013 5:49 pm

Re: What documents do I need to get a low doc commercial loa

Post by Chekhov »

Thanks for explaining things to me.

What type of income evidence must I need to provide if I want to get a full doc loan instead? I would also like to know how much I can borrow on a low doc loan.

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Otto Dargan
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Re: What documents do I need to get a low doc commercial loa

Post by Otto Dargan »

Hi Chekhov,

You may apply for a full doc loan if you can prove your income in full. This may require you to provide your payslips for the last two years if you are an employee. If you are self employed then you may need to provide your tax returns for the last two years.

If you are not able to provide any evidence of your income then you may apply for a no doc loan. As this type of loan has a much higher rate of interest, it is not much common.

Regarding the low doc loan, if you are buying a commercial property then you may be able to borrow up to:
  • 80% of the purchase price.
  • 65% of the purchase price with reduced interest rates.
  • 80% of the value of any other properties that you own including residential properties.
If you are refinancing a commercial property then you may be able to borrow up to:
  • 80% of the property value.
  • 100% of the value of any residential properties that you own, if the loan is for business purposes.
You can call us on 1300 889 743 if you want to talk to one of our experts regarding your home loan needs or fill in our free assessment form to see if you qualify for a loan or not. You can also visit our website if you want to learn more.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

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Chekhov
Posts: 39
Joined: Mon Jul 15, 2013 5:49 pm

Re: What documents do I need to get a low doc commercial loa

Post by Chekhov »

I would like a discounted interest rate, but 65% LVR seems too low for me. I think I’ll call you by Friday to discuss my loan application. Thank you very much for your time, Otto.

Sabrina
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Joined: Wed Jul 03, 2013 2:39 pm

Re: What documents do I need to get a low doc commercial loa

Post by Sabrina »

Greetings. I was researching commercial property loans when I came upon this thread. I got to learn even more about low doc loans because of that. I would like to make an enquiry here as well. I want to know a little bit of the basics about a lease doc loan. Can anyone provide me with the info that I’m looking for?

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Otto Dargan
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Re: What documents do I need to get a low doc commercial loa

Post by Otto Dargan »

Hi Sabrina,

Unlike a full doc loan, a lease doc loan relies on the strength of the rent income from the property used to secure the loan and thus will not require full income evidence.

Lease doc loans generally offer the following features:
  • You may be able to borrow up to 70% of the property value.
  • You may not require payslips, tax returns, or financial statements.
  • Many lenders may have a minimum lease term.
However, you must:
  • Not lease your own company or that of close relatives.
  • Have a commercial investment property as security.
  • Have sufficient income from the leased property to cover the interest on your loan.
You may also benefit from knowing that the lender may assess the lease income by looking at:
  • The financial strength of your tenant.
  • The remaining term of the lease.
  • The interest cover ratio.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Sabrina
Posts: 47
Joined: Wed Jul 03, 2013 2:39 pm

Re: What documents do I need to get a low doc commercial loa

Post by Sabrina »

That was exactly what I was looking for. Thanks a lot! It seems I stumbled on a goldmine of information here at this forum, as it led me to your website. I will call your office if I have any more queries. Cheers.

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