Low Doc Business Loans: How They Work and Who Qualifies

Plenty of profitable businesses can’t produce up-to-date tax returns when they need finance. Your accountant may be behind on lodgements, your latest year may not reflect how the business is trading now, or you may have grown quickly since your last return. A low doc business loan lets a lender assess you on more recent evidence instead.

What is a low doc business loan?

“Low doc” means low documentation. Instead of two years of tax returns and full financial statements, the lender verifies your income using alternative documents. The loan itself works like any other business loan: it can be secured against property, used to buy equipment, refinance existing debt or fund working capital.

What documents replace tax returns?

Each lender has its own policy, but most will accept one or more of the following:

• BAS statements, usually for the last 6 to 12 months
• Business bank statements showing regular turnover
• An accountant’s declaration confirming your income
• Your ATO portal statement, to show tax obligations are under control
• A signed income declaration from the directors

Who usually qualifies?

• Self-employed borrowers, companies and trusts with an active ABN, typically registered for at least 12 months
• Businesses registered for GST
• Borrowers with a reasonable credit history, or a clear explanation for past issues
• Borrowers with security, usually property, when the loan amount is larger

Low doc vs full doc: the trade-offs

• Loan-to-value ratio (LVR). Low doc lenders usually cap the loan at a lower percentage of the property’s value than a full doc loan. See our guide to what LVR means.
• Pricing. Rates and fees are often higher to reflect the extra risk the lender is taking on.
• Speed. Low doc can be faster, because you aren’t waiting for an accountant to finalise financials.
• Refinancing later. Once your tax returns are up to date, you can often refinance to a full doc loan on sharper terms.

How a broker helps

Low doc policies differ a lot between banks, non-banks and private lenders, especially on how they verify income and how much they will lend. We match your documents to the lenders on our panel of 100+ that will accept them, so you aren’t declined for paperwork reasons. Read more about our business loans, unsecured business loans and private lending.

Frequently asked questions

Can I get a business loan without tax returns?

Yes. Low doc lenders can assess your business using BAS statements, business bank statements or an accountant’s declaration instead of up-to-date tax returns and financials.

Are low doc loans more expensive?

Usually a little. Because the lender has less information, rates and fees are often higher than a full doc loan and the maximum loan-to-value ratio is lower. The gap varies a lot between lenders.

How long do I need to have been in business?

Most low doc lenders want your ABN registered for at least 12 months, and some ask for 24 months. GST registration is commonly required too.

This article is general information only and doesn’t take into account your objectives, financial situation or needs. Speak to us or your accountant before making a decision.