Why do most lenders look for an ABN?

Low doc loans were designed to give self employed borrowers the ability to obtain a loan without verifying their income via tax returns.

As a minimum, you need to provide your ABN but what if your ABN is under 2 years old?

What if I don’t have an ABN?

Due to the introduction of the NCCP Act, the only ways to obtain a low doc loan with no ABN is through:

What is an ABN?

ABN stands for Australian Business Number and it identifies your business in all dealings with the tax office and other government bodies. Your ABN may be identical to your ACN (Australian Company Number) issued by ASIC (if applicable) with two additional digits tagged on the front.

Your ABN can be registered for GST and PAYG tax withholdings as well as other taxes such as luxury taxes. Please note that an ABN is not the same as a TFN (Tax File Number). Even sole traders should have a separate ABN to their TFN.

What do most lenders require?

In addition to the normal 20% deposit and income declaration requirements, the majority of low doc lenders will need proof of a registered ABN of at least two years old which is listed for GST as well.

If you are declaring an income of $200,000 with your low doc loan and your ABN is not registered for GST then either you are lying about your income or breaching the ATO’s GST registration requirements!

Lenders like to see that your business has been trading for at least two years because younger businesses have less stable incomes and are at a higher risk of getting into financial trouble.

Are there any exceptions to ABN policy?

In certain circumstances, lenders may waive their normal policy of proving that you have had an ABN registered for at least two years. For example, if you were employed by a plumber but you decided to open your own business as a plumber, lenders may only need your ABN to be one year old.

If your business got restructured and was issued with a new ABN then you can usually show your old and new ABN as proof that your business is greater than two years old.

Professional share traders, other investors and trust beneficiaries often have significant incomes but cannot prove them to a bank. In these situations, banks can consider low doc loans without ABNs.

However, many of the lenders that do not require an ABN would decline your loan if you write on the application that you were a professional investor. In their view, you are not self employed and do not meet their low doc lending policy.

How can I find out what my ABN is or if I have one?

You can visit the government’s ABN Lookup website to search for your ABN.

If you are a sole trader or in partnership then search for your own name. Companies should search for the company name, and trusts should search in the format of “The Trustee for the ABC Trust” as opposed to searching for the name of the trustee.

How can I apply for an ABN?

You can apply for an ABN at the Australian Business Register.

What if I lie about being self employed to get a loan?

We do not recommend that you commit fraud to get your home loan approved. Aside from the moral and legal issues, you will stand a good chance of getting caught. The lender can often see who your employer is in the credit file and may look for your business name in Google, government registers or in the yellow pages.

Instead there are PAYG low doc loans and other types of specialist low doc loans that can help you if you do not have an ABN and are not self employed.

Will I pay a higher interest rate if I don’t have an ABN?

Yes, most lenders that do not require an ABN will charge you a higher interest rate. However this varies depending on why you do not have an ABN and which lenders can consider your application.

Speak to a mortgage broker today

Enquire online or call us on 1300 889 743 and we will find the loan that is right for you! We have several no doc lenders that can assist professional investors and self employed borrowers without ABNs.

  • DB Low

    I have been trapped into a dodgy solicitor’s mortgage with an interest rate of 7% and if I miss a single payment, it turns 12%. This “broker” was introduced to me by a friend and now I cannot afford a legal representative to explore the matter so I want to refinance it to get out of this contract. I do not even have complete copies of my loan contract. My loan is $ 370,000 and was previously $225,000. My property is worth around $750,000.

  • Hi, sorry to hear about that. We’d need to look at the full details of your situation to work out the best way forward. It’s likely we’ll refinance to a specialist lender which would mean a rate of 4% to 7%. After building a good track record, which can take 1 – 4 years, we can refinance you back to a bank on a low rate. Please call us to discuss.

  • Wilsey

    Because of some business restructuring, we were issued a new ABN recently. We got our ABN first two years ago so can we use the old ABN or will we now be considered new because of the new ABN?

  • Hi Wilsey, if your business got restructured and was issued with a new ABN then you can usually show your old and new ABN as proof that your business is greater than two years old.

  • Jill J

    I just want to borrow around 60% of the property value so can I just go for a no doc loan instead?

  • Hey Jill,

    We can help you borrow up to 65% of the property value with a no doc loan through larger second tier lenders at competitive interest rates. To find out more about what you need to qualify, you can check out the no doc loan page and enquire online directly through there if you’d like the help of our expert no doc specialists:

  • Regal

    Do you have any low doc interest rates that I can check out?

  • Hi Regal,
    Yes, you can check out some of the current low doc interest rates under the “Specialist Loans” tab on the interest rates page. Here’s the link to it:

  • Everett

    Is the risk-fee on some low doc loans just another name for LMI or will this be charged on top of it?

  • Hey Everett,

    It’s actually different as some lenders effectively self-insure their loans and charge a risk fee instead of obtaining LMI. This means there is no external mortgage insurer but you pay the risk fee instead.

  • Fari

    I have a full time work for more than a year but I also drive Uber for last one year (on ABN). Will any lender consider only one year or near one year of Uber earning in addition to the Full time job for Home loan?

  • Hi Fari
    This is possible but not always easy. It would depend on the size of your deposit, what % of the purchase price you are providing and what evidence you have of your uber income.

  • Fari

    I have letter from ATO about the Tax mentioning the amount, Invoices from Uber etc.
    Can you please provide me a contact to consultant to discuss more?

  • What % of the property value are you looking to borrow? If you’re looking at 80% or less then that kind of evidence will be ok. If you’re looking for more we’d need to wait 6 weeks and then you can do your tax return for this financial year.