Why paperwork stops good businesses getting funded
Banks and trade credit providers usually want years of financials and check credit history. That works if your tax returns are lodged on time, your accountant is quick and the last two years were profitable. It doesn't work if:
- Your latest tax return hasn't been lodged yet.
- You are a few BAS behind, often because you have been busy running the business.
- Last year was a loss because of a one-off event, even though trading has recovered.
- The business is new, restructured or recently bought.
- Your accountant can't produce a letter in time.
- Your bank statements show the strain of daily-debit loans.
In all of these cases the business may be perfectly able to repay a short-term loan, but the paperwork says otherwise or simply isn't available.
What low doc means at Equity Tap
For a property-secured loan, Equity Tap doesn't need tax returns, BAS, profit and loss statements, an accountant's letter or bank statements. We lend from $50k to $5m for one to twelve months, secured by a first or second mortgage or caveat over Australian residential or commercial property, and we assess the loan on the security, the purpose and the exit.
Documents compared
| Document | Typical bank | Typical cash flow lender | Equity Tap property-secured loan |
|---|---|---|---|
| Tax returns (two years) | Usually required | Sometimes | Not needed |
| BAS | Usually required | Often | Not needed |
| Profit and loss, balance sheet | Usually required | Sometimes | Not needed |
| Accountant's letter | Often | Rarely | Not needed |
| Bank statements | Usually required | Required | Not needed |
| Valuation | Usually required | Not applicable | Not ordered before approval |
| ID, property and mortgage details | Required | ID only | Required |
| Purpose and exit evidence | Sometimes | Rarely | Required |
What we still need
Low doc doesn't mean no doc. To lend responsibly and quickly we still need:
- ID for every borrower and guarantor.
- Property details: the address of the security property and how it is owned.
- Existing mortgage details: the lender and the balance owing.
- The purpose: what the money is for. It must be a business purpose.
- Exit evidence: how the loan will be repaid, such as a contract of sale, refinance application, receivables or a business sale agreement.
Our business loan documents guide lists what different lenders ask for and why.
Why we can lend this way
A short-term secured loan is repaid from a specific exit, not from years of future profit. What matters is that there is enough equity in the property and a believable way to repay within the term. That is why historical financials matter less to us than to a bank lending over 25 years. We are business owners lending to business owners, and we understand that a late BAS often says more about how busy you are than about how healthy your business is.
Low doc and bad credit
There is no credit check at initial assessment. Bad credit history, defaults, ATO debt or a past decline are not automatically a problem. A credit check may be made before funding, but we look at the whole picture. See bad credit business loans and business loans after a court judgment.
Common uses
- Paying an ATO debt so the business can get back on track. See ATO tax debt business loans.
- Clearing daily and weekly repayment loans. See business debt consolidation loans.
- Working capital while financials are brought up to date. See secured working capital loans.
- Buying a business or stock quickly. See buying a business with fast finance.
For example, a business owner who is two years behind on tax returns, with an accountant now catching them up, could use a low doc loan to fund the business for six months and then refinance to a bank once the returns are lodged.
Low doc for brokers
Brokers often know within minutes that a client won't fit a bank's document checklist. Rather than spending weeks chasing an accountant for returns that aren't ready, send the scenario through our broker page. You deal with the same lending team, get a fast indicative answer and can line up the bank refinance as the exit once the client's financials are lodged. That keeps the client funded now and keeps the long-term loan with you.
How fast
Because there is less paperwork, things move faster. Conditional approval can often be given on the phone and a term sheet issued in about 30 minutes once we have the scenario. Eligible loans can settle in as little as 24 hours. See same-day business loan approval.
Pricing
Each loan is priced on the client's individual circumstances, aiming for the sharpest rate available for that situation, with the full cost shown before you proceed.
Talk to us
Don't let a pile of unfinished paperwork cost you an opportunity. Call 1300 123 024 or apply online. Brokers can send scenarios through our broker page.
Business-purpose lending only. Approval, timing and terms depend on the scenario.
Frequently asked questions
What is a low doc business loan?
What documents do I need for a low doc loan?
Can I get a business loan if my tax returns aren't lodged?
Are low doc loans only for people with bad credit?
Do I need a valuation for a low doc business loan?
Can I refinance a low doc loan to a bank later?
Brokers: send the scenario through the Equity Tap broker channel and you will deal with the same lending team.