How to Apply for an ABN Car Loan?

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 an ABN Car Loan?

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 vehicle being purchased is used as security against the loan. Fixed monthly repayments are made over the term of the loan until the car is paid off. There are several benefits, including potential tax deductions, that business owners can take advantage of.

Are you Eligible to Apply for an ABN Car Loan?

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, the vehicle being purchased must be used for 'predominantly' business purposes. That is, over 50% of the time, the car must be used to generate revenue for your business.

How to Apply for an ABN Car Loan?

Appling for business finance can be overwhelming. The last thing you want to do is have your ABN car loan declined, and/or 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 in the correct manner to get you an ABN car loan approval at the best possible interest rate. Find out more about the benefits of using a finance brokers for ABN car loans.

6 steps to Apply for an ABN Car Loan

1. Complete an application form and submit documentation.
2. Compare loan options and determine the most suitable lender.
3. Submit the loan application.
4. Get loan approved.
5. Provide vehicle details.
6. Settle loan.

Step 1 involves completing an application over the phone, which takes approximately 5 minutes. We will require your ABN, personal information including 3 years residential history, 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.

Secondly, the finance broker will then assess your application and short list potential 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 then submit your loan application to the most suitable lender. An ABN car loan approval usually takes only 24 to 48 hours through AAA Finance. If you have not yet decided on a vehicle, we can organise a pre-approved loan. This allows you to shop with confidence, knowing your funding is approved. 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.

What will be my ABN Car Loan Repayments?

The loan term, interest rate and balloon repayment all impact your car loan repayment.

1.  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.
2. Loan Terms can vary from 1 to 7 years. As you increase your loan term the monthly loan repayment decreases. Reduced payments can ensure that your repayment fits withing budget and allows for continued positive business cash flow.
3. 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 presents, the lower the interest rate you will be offered.

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.

What are your ABN Car Loan Options?

The status of your ABN, your available financial documentation, and the vehicle being purchased influence what type of ABN Car Loan you will be eligible for.

There are 3 options –

1. No Doc ABN Car Loan
2. Low Doc ABN Car Loan
3. 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. On the other hand, a full doc loan suits businesses that have only been operating for a short time and are not GST registered.

What Financial Documents do you have?

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 Loan 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 usage for business purposes
• Length of business operations

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.

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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!!”

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FAQ’s

Q: Can I get a car loan with an ABN?       

A: Yes, you can get a car loan with an Australian Business Number (ABN). Many lenders offer specific car loan products designed for businesses and individuals with an ABN.

Q: Is it hard to get a car loan as a sole trader?

A: It is not necessarily hard to get a car loan as a sole trader, but it can be more challenging compared to salaried employees. Lenders typically require proof of income and a solid credit history.

Q: How long does the ABN car loan application process typically take?

A: The ABN car loan application process can vary depending on the lender and the complexity of your financial situation. Generally, it takes 3-5 days from application to loan settlement. Having the required documentation ready can help speed up the process.

Q: Can I get an ABN Car Loan with a Balloon Payment?

A: Yes, you can get an ABN car loan with a balloon payment. A balloon payment is a larger lump sum due at the end of the loan term, which can reduce your monthly repayments during the loan term.

Q: How long will it take to approve my ABN car loan?

A: The approval time for an ABN loan can be as little as 24 to 28 hours. However, an approval can take longer if additional information is required or if your financial situation is complex.

Q: What are the tax benefits of an ABN car loan?

A: ABN car loans have several tax benefits associated with them. These include claiming vehicle depreciation and interest on the loan. If you have a GST registered ABN, you can also claim the GST on the vehicle purchase price. Running cost, such as fuel, maintenance and insurance, are tax deductible as a business expense.