If you have a brand spanking new ABN, there are a few things you need to know before you apply for new or used car finance to avoid unnecessary disappointments with applications.
You may have heard the term Day 1 ABN finance. This refers to finance for new ABN holders.
Previously, it was really difficult for ABN holders to get finance with a new ABN number. But nowadays, there are many more lenders and financiers offering great low rates to ABN holders and people new to being self-employed.
Day 1 ABN car finance is usually suitable for people who have had an ABN anywhere from one day to up to two years. There are products specifically designed for borrowers who meet this lending criteria.
However, you may not find these products advertised. Day 1 ABN car loans can also be referred to as low-doc car loans or no doc car loans. ‘Low doc’ and ‘no doc’ simply means the documents required to meet lending criteria are not as strict as traditional ABN and business loans.
In most cases, people new to self-employment are unable to provide banks and brokers with the standard required documents to prove income. These documents include:
- Pay slips
- Tax returns
- Bank statements
When you apply for a self-employed loan with a specialist lender you may be asked to produce paperwork which can demonstrate a strong business model which gives an indication that enough cashflow will be generated to meet the loan repayments.
These are the types of documents you may be asked to produce to give yourself the best chance for fast approval:
- Business plan
- A letter from your accountant
- Any contracts in place with businesses
- Proof the vehicle will be used for your business over 51% of the time