When you apply for an ABN car loan the process can seem quite dauting. Whether you’re a sole trader, a small business owner, or running a larger enterprise, an ABN car loan can help you finance a vehicle for business use. This article will walk you through the ins and outs of ABN car loans and explains what the application process entails.
What is ABN Car Finance?
ABN car loans are a type of business car loan only available to those with an Australian Business Number (ABN). Just like a normal loan, the lender uses the vehicle as security. You make fixed monthly repayments throughout the loan term until you fully pay off the car. There are several benefits, including potential tax deductions, that business owners can take advantage of.
Are you eligible for ABN Car finance?
Firstly, we need to establish if you are eligible to apply for an ABN car loan. To be eligible for this type of loan you need to have an active ABN. Most lenders require your ABN to have been operational for at least 12 months. In addition, you must use the vehicle predominantly for business purposes. This means you need to use the car to generate revenue for your business more than 50% of the time. Find out more about eligibility for a low doc car loan here.
Applying for ABN Car Finance
Appling for business finance can be tricky. The last thing you want is to have your ABN car loan declined and negatively affect your business and personal credit rating. This is where experienced finance brokers, such as AAA Finance, can help. At AAA Finance we specialise in helping business owners navigate the vast field of lenders and the ever-changing criteria. We have a panel of over 40 lenders to select from. We present your business to lenders the right way to secure your approval at the lowest interest rate. Find out more about the benefits of using a finance brokers for ABN car loans.
Application Process
Firstly you will need to complete an application over the phone, which takes approximately 5 minutes. We will require your ABN, personal contact information, the vehicle details, and any assets and liabilities. Whilst completing the application form, we will discuss what financial documentation you have available to prove income.
Next, your application is assessed to determine a short list of suitable lenders. From this selection the broker will compare interest rates, fees, features and check eligibility criteria without impacting your credit score. Brokers advocate for you and negotiate the best terms with lenders directly. Next, the broker will submit your loan application to the most suitable lender. An ABN car loan approval with AAA Finance usually takes only 24 hours. If you have not yet decided on a vehicle, we can organise a pre-approved loan. This gives you the confidence to shop, knowing you have approved funding. When you are ready to proceed, we will require a tax invoice with the Vehicle Identification Number (VIN). We then produced your loan documents for signing. Finally, funds are transferred to the seller, and you can take possession of your new work vehicle.
ABN Car Finance Repayments
The loan term, interest rate and balloon repayment all impact your car loan repayment.
- Balloon Repayments. Your loan structure can include a balloon repayment. This option reduces the monthly loan repayment, while leaving a lump sum or ‘balloon’ payment. At the end of the loan term the balloon is paid in full or refinanced.
- Loan Terms can vary from 1 to 7 years. As you increase your loan term the monthly loan repayment decreases. Lower repayments can ensure you stay within budget and allows for continued positive business cash flow.
- Interest Rate. The interest rate you will be offered depends on a variety of factors. Lenders offer an interest rate based on your risk profile. The more stable and financially secure your business appears, the lower the interest rate you receive.
Our easy-to-use ABN Car Loan Calculator lets you quickly estimate your car loan repayment to ensure that your new purchase will fit into your budget. A monthly repayment is calculated by simply entering your loan amount, loan term and an interest rate. You can even include a balloon payment to see how this option can potentially affect your ABN car loan repayment.
ABN Car Finance Options
Your ABN status, financial documentation, and the vehicle you purchase determine your eligibility for each ABN Car Loan option.
There are 3 options –
- No Doc ABN Car Loan
- Low Doc ABN Car Loan
- Full Doc ABN Car Loan
As the names suggest, the main difference between each option is the amount of required financial documentation. Business owners who own property and have a GST registered ABN that has been operating for several years will be eligible for a no doc ABN car loan.
What Financial Documents are Needed?
Each lender has different requirements; however, each lender wants some type of proof of income. Proof of income could include your latest full Tax Return and Notice of Assessment, Business Activity Statement (BAS), Profit and Loss Statement, Bank Statements or simply a Self-Declaration.
The length of time your ABN has been running and its GST registration status has a large impact on what documents a lender will ask for. Knowing what documents are available allows us to narrow down suitable lenders.
Other Required Documentation
To secure finance you will need to provide additional documents. Identification usually includes a copy of your driver’s licence and Medicare card. A rates notice proves property ownership. Being a property owner can reduce the interest rate and increase the number of lenders wanting to offer you finance. You will also need to sign a privacy form when working with a broker or individual lender. Read more about what documents are required for an ABN car loan.
Common Reasons ABN Car Finance Applications are Rejected
No one wants a loan declined. Not only does it negatively affect your credit rating, but it also raises questions for the next lender you approach for a loan. The most common reasons for an ABN car loan to be decline include:
- Insufficient business income / revenue
- Poor credit history of business / owner
- Incomplete documentation / information
- Vehicle is not fit for business purposes
- Business operating for a short duration
Ongoing Support from AAA Finance
Not only can AAA Finance streamline your ABN car loan application and ensure you get the best outcome for your situation. We can also provide guidance on maximizing tax benefits and deductions available for ABN holders. In addition, we offer ongoing support throughout the loan term, including refinancing options if circumstances change.
By leveraging our expertise, lender relationships and negotiation power, AAA Finance can ensure you obtain a tailored financing solution with competitive terms and minimal documentation requirements.
Client Testimonial of AAA Finance Service
Chris is one of AAA’s long-term clients, who has written a few words about our service.
“Getting finance is a big step to take and can be a bit daunting. AAA Finance makes the process so easy, which is the reason why I am a repeat client having now purchased multiple vehicles through using their service. You get genuine service from an honest team and assured you are looked after. Give them a go once, it’s all you’ll need!! Thanks AAA Finance!!”
