ABN Car Loan

What is an ABN Car Loan?

Securing a car loan using your Australian Business Number (ABN) presents numerous advantages for both business owners and self-employed individuals. An ABN car loan is a type of business loan, also known as a chattel mortgage. This type of loan allows different types of businesses to secure a loan against a motor vehicle. The 'chattel' is the asset or car purchased. The 'mortgage' is the loan. The loan uses the asset as security whilst the loan is repaid. There are a number of business car loan options available to ABN holders that negate the need for payslips. In some instances, no paperwork is required to secure a loan. AAA Finance compares ABN Car Loans and get you the best deal town - saving you both time and money!

Who Can Get an ABN Car Loan?

Businesses ranging from sole traders, partnerships, companies and trusts to large corporations can use ABN car finance to purchase vehicles. To be eligible for ABN car finance you must have the following:

• Have an active Australian Business Number (ABN).
• Be an Australian citizen or permanent resident.
• Be at least 18 years old and hold a valid driver's license.
• Meet the lender's minimum business trading period requirement, usually between 1 to 2 years.
• Plan to use the vehicle for, at least 50% of the time, in business related activities.

Are there Different Types of ABN Car Loans?

There are 3 car finance options for ABN holders. The first is a no doc car loan, second a low doc car loan and third a full doc car loan. The amount of financial documentation is the main difference between these options.

1. A no doc car loan is suitable for established business that have been operating for a number of years with the owners being asset backed.
2. Low doc car loans are a popular choice for business owners.  Although a current business tax return is not required, some documentation may be required to substantiate income. This may include interim financials such as BAS, profit and loss and/or bank statements.
3. Full doc car loans require up-to-date financials to secure finance.  

ABN car loans provide flexible financing options for businesses and sole traders. No and low doc ABN car loans options enable business owners to acquire vehicles with less documentation required compared to traditional loans. Find out more about documents required for ABN car loans.

What are the Benefits of an ABN Car Loan?

Using your ABN to secure a car loan offers several potential benefits for business owners and self-employed individuals:

1. Tax Deductions and GST Benefits

Both the interest on the loan, as well as any vehicle depreciation, can be claimed as a tax deduction. If the ABN is GST registered, the GST on the purchase price can also be claimed. Consult with a tax professional to understand the specific deductions applicable to your situation.

2. Access to Business Interest Rates and Loan Terms

Loans obtained through your business may offer more favorable interest rates and terms compared to personal loans. Business loans often come with lower interest rates, starting from around 6% to 7.5% for established businesses with good credit history. Flexible loan terms, usually up to 5 to 7 years, are also available. By extending the loan term, you can lower the monthly payments to maintain cash flow. Business ABN car loans can range from $10,000 up to $1 Million.

Use our car loan calculator with balloon payment option to determine if your new purchase will fit within budget. Simply input the rate, term and loan amount to calculate a monthly loan repayment. You can also include a balloon payment, which is a popular option for business owners.

3. Balloon Repayment Options

A 'balloon' or residual payment is a lump sum due at the end of the finance term. A balloon payment reduces the ongoing monthly loan repayment. At the end of the loan term, the balloon is either paid out or refinanced. Many business owners sell the now 'used car' and with the proceeds pay out the balloon. Any left over funds can then be used as a down payment for a new vehicle purchase.

4. Improved Cash Flow Management

100% of the vehicle can be financed, with no deposit required. The finance amount can also include any accessories, such as bull bars and tow balls. By financing a vehicle through your business, you can preserve your cash reserves for other expenses. This can help with cash flow management and provide greater flexibility in your finances.

Business loans are paid via monthly direct debit payments. This makes it easier for business owners to manage and allows you can focus on running your business.

5. Building Business

Having the right vehicle tailored to your business needs can significantly enhance productivity and efficiency. A purpose-built vehicle allows for more effective transport of goods, equipment, or personnel, reducing downtime and operational costs. This optimization leads to faster service delivery, improved customer satisfaction, and increased profitability. Investing in the right vehicle helps scale operations smoothly and stay competitive.

Additionally, making timely payments on a business car loan can help establish and build credit for your business. A positive credit history can improve your business's credibility and increase your access to future financing options at favorable terms.

How Can AAA Finance Help?

Every business has a unique situation and every lender has different qualifying criteria. AAA Finance are here to help you navigate the complexities of business vehicle finance. Our team has a wealth of experience, knowledge and know how. We compare ABN car loans from our panel of over 40 lenders to get you the best deal. Let the AAA finance experts cut through the red tape and finance jargon to get you the most competitive business car loan to suit you. Call one of our friendly and experienced car loan experts today on (07) 5493 1222.

Quick Approvals & Easy Application

Alternatively you can get a pre-approved car loan, which can give you piece of mind. Have your funds approved before you start looking for the perfect business vehicle. A pre-approval can be provided without impacting your credit score. Find out more about the benefits of using a finance brokers to obtain ABN car finance.

How to Apply For an ABN Car Loan?

Applying for ABN Car Finance is easy with AAA. The requirements for applying for an ABN car loan include:

1. Complete a 5 minute loan application over the phone.
2. Provide your identification - Drivers Licence and Medicare card.
3. Give an indication of your business revenue in terms of gross turnover and net profit.
4. Sign a privacy form to allow us to speak to lenders on your behalf.

Once we have the above information, one of our experienced finance brokers will speak to a number of our lenders that specialise in ABN Financing. Factors such as your credit score, vehicle details, and available documentation, determine which lenders will be most suitable for your particular situation. Your broker will discuss the best options with you. Once a lender is chosen, we will get your loan approved, the loan agreement signed, and finalised upon receipt of the vehicle invoice and insurance.

Useful Link | ATO Guide to Luxury Car Tax

This link takes you to the ATO site - Who needs to pay LCT and who can defer paying it?