Loan basics
Low-doc business loans explained
Low-doc loans let self-employed borrowers and businesses with out-of-date financials borrow using alternative evidence of income. Here is how they work.
- Reviewed by
- Kama Atcheson, Business lending specialist
- Published
- Last reviewed
- Reading time
- 5 min read
Key takeaways
- Low-doc loans replace full financials with alternatives such as BAS, bank statements or an accountant's declaration.
- They suit self-employed borrowers whose tax returns are behind or do not reflect current income.
- Expect lower maximum LVRs or amounts and pricing above full-doc lending.
Plenty of healthy businesses cannot produce two years of up-to-date tax returns on demand. Returns may be late, the business may have grown fast, or recent performance may be far stronger than last year’s figures show. Low-doc lending exists for exactly this.
What “low doc” means
A low-doc (low documentation) loan is assessed using alternative evidence of income instead of full financial statements and tax returns. Depending on the lender, that can include:
- recent Business Activity Statements (BAS)
- business bank statements
- an accountant’s letter confirming income
- a signed declaration of income, often alongside one of the above
Low-doc options exist across commercial property, equipment and vehicle finance, and some business loans.
Who it suits
- Self-employed borrowers whose tax returns are not yet lodged
- Businesses whose recent performance is stronger than their last return
- Newer businesses with a solid track record in bank statements
- Borrowers who need to move quickly on a purchase
The trade-offs
- Lower maximums. Lenders often cap the LVR or loan amount lower than full-doc lending.
- Higher pricing. Less information means more risk for the lender.
- Security matters more. Many low-doc products are secured by property or the asset being financed.
Tips
- Get your BAS lodged and up to date. It is the most common low-doc evidence.
- Keep business and personal banking separate so statements tell a clear story.
- Talk to your accountant early if a letter is needed.
Filter for low-doc options on the Business Loans or Commercial Property Finance pages, or ask us to match you.
Questions about this topic
What documents do low-doc lenders accept?
Common alternatives include recent BAS, business bank statements, an accountant's letter or a signed income declaration. Requirements vary by lender.
Are low-doc loans more expensive?
Usually somewhat, because the lender has less information. The gap depends on the lender, security and your credit history.
