Low Doc Commercial Loans
If you’re an Australian expatriate or foreign buyer looking to invest in commercial property in Australia, you may be wondering if you’re eligible for a low doc commercial loan. Low doc loans are designed for borrowers who may not have the traditional documentation required for a commercial loan, such as tax returns or financial statements.
In this article, we’ll discuss what low doc commercial loans are, who they’re for, and how to get one.
What are Low Doc Commercial Loans?
Low doc commercial loans are a type of commercial loan that is designed for borrowers who may not have the traditional documentation required for a commercial loan. This documentation can include things like tax returns, financial statements, and business valuations.
Low doc commercial loans are typically offered by smaller lenders, as they are more willing to take on borrowers who may not have the traditional documentation. However, some larger lenders also offer low doc commercial loans.
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Who are Low Doc Commercial Loans For?
Low doc commercial loans are typically for borrowers who fall into one of the following categories:
- Self-employed borrowers who do not have traditional documentation to prove their income.
- Borrowers who have recently started a business and do not have two years of tax returns.
- Borrowers who have a poor credit history.
- Borrowers who are looking to invest in commercial property but do not have the traditional documentation required.
Eligibility Criteria for a Low Doc Commercial Loan
Before applying for a low doc commercial loan, you need to understand what lenders look for in your application. Here are the eligibility criteria:
- Good credit score: Most lenders require a credit score of at least 680 for a low doc commercial loan.
- Some assets: You will need to have some assets, such as a home or a business, to qualify for a low doc commercial loan.
- The ability to repay the loan: You will need to be able to afford the monthly payments on the loan.
- A business plan: You will need to provide a business plan that outlines your goals for the property and how you plan to repay the loan.
Documentation Requirements
Lenders also require the following documents in order to accept your loan application:
- Personal financial information: This may include your tax returns, bank statements, and proof of income.
- Business financial information: This may include your business’s tax returns, bank statements, and financial statements.
- Property information: This may include the property’s appraisal, title report, and survey.
How to Get a Low Doc Commercial Loan
Applying for a low doc commercial loan is a pretty straightforward process. The process of applying for a low doc commercial loan includes the following steps:
- Meet the eligibility criteria: As mentioned above, you’ll need to meet the eligibility criteria set by the lender, which typically includes having a good credit score, some assets, and the ability to repay the loan.
- Gather the required documentation: The documentation requirements may vary depending on the lender, but you’ll likely need to provide your personal financial information, business financial information, and property information.
- Shop around for lenders: There are a number of lenders that offer low doc commercial loans, so it’s important to shop around and compare rates and terms before you choose one.
- Apply for the loan: Once you’ve found a lender that you’re interested in, you can apply for the loan. The lender will assess your application and decide whether or not to approve your loan.
- Close the loan: If your loan is approved, you’ll need to close the loan. This involves signing all of the paperwork and funding the loan.
Increase Your Chances of Getting Approved
To increase your chances of obtaining a low doc commercial loan and to ensure a smooth application process, consider the following tips.
Prepare Your Financial Records
Although low doc loans require less documentation than traditional loans, you still need to provide some financial information. Gather your bank statements, tax returns, profit and loss statements, and any other relevant financial records. These documents will demonstrate your income and financial stability to the lender.
Organize Your Business Documents
Prepare any necessary business documents such as your business registration certificates, licenses, and contracts. These documents help establish the legitimacy and continuity of your business.
Understand Your Creditworthiness
Check your credit score and review your credit history. Lenders may consider your creditworthiness when assessing your loan application. If you have any outstanding debts or negative marks on your credit report, take steps to address them before applying for the loan.
Research Lenders
Look for lenders who specialize in low doc commercial loans. Compare their interest rates, repayment terms, and loan features. It’s important to find a lender that offers favorable terms that align with your financial needs and goals.
Prepare a Strong Loan Application
Provide a comprehensive and well-structured loan application. Clearly explain the purpose of the loan, how it will benefit your business, and your plans for repayment. The more information you provide, the easier it will be for the lender to evaluate your application.
Be Ready for a Higher Interest Rate
Low doc commercial loans often come with slightly higher interest rates compared to traditional loans. Be prepared for this rate increase and factor it into your financial calculations to ensure that the loan remains affordable for your business.
Tips for Australian Expats and Foreign Investors
If you’re an Australian expatriate or foreign buyer looking to invest in commercial property in Australia, here are a few tips:
- Do your research. Before you apply for a low doc commercial loan, it’s important to do your research and understand the different lenders and their requirements.
- Get pre-approved. Once you’ve found a lender that you’re interested in, get pre-approved for a loan. This will give you an idea of how much money you can borrow and what the terms of your loan will be.
- Work with a qualified mortgage broker. A qualified mortgage broker can help you find the right lender for your needs and guide you through the application process.
Speak with our Expat Mortgage Brokers
Low doc commercial loans can be a great option for Australian expats and foreign investors who are looking to invest in commercial property in Australia. However, it’s important to do your research and understand the different lenders and their requirements before you apply for a loan.
If you’re considering a low doc commercial loan, be sure to contact a qualified commercial loan mortgage broker who can help you find the right lender for your needs.
Our team of expat mortgage brokers has years of experience helping Australian expatriates and foreign buyers secure the financing they need to invest in commercial property in Australia. We can help you understand the different types of low doc commercial loans available, compare rates and terms from different lenders, and get pre-approved for a loan.
Reach out to us today to learn more about how we can help you finance your commercial property investment.
Get a free Australian mortgage assessment today.
Frequently asked questions
What if my application is rejected?
If your application for a low doc commercial loan is rejected, there are a few things you can do:
- Ask the lender for feedback: The lender may be able to provide you with feedback on why your application was rejected. This feedback can help you to improve your chances of getting approved for a loan in the future.
- Reconsider your goals: If your application was rejected because you didn’t meet the lender’s eligibility criteria, you may need to reconsider your goals. For example, you may need to save up more money or improve your credit score before you can qualify for a loan.
- Shop around for other lenders: There are a number of lenders that offer low doc commercial loans, so it’s worth shopping around to see if you can find a lender that will approve your loan.
- Consider other financing options: There are a number of other financing options available, such as asset-based loans or character loans. These loans may be a good option if you don’t meet the eligibility criteria for a low doc commercial loan.
Can I refinance a low doc commercial loan?
Yes, you can refinance a low doc commercial loan. However, it’s important to note that not all lenders will offer refinancing for low doc loans. You’ll need to shop around and find a lender that is willing to refinance your loan.
If you’re considering refinancing your low doc commercial loan, there are a few things you should keep in mind.
- Ensure that you’re able to afford the new monthly payments.
- Compare interest rates from different lenders to make sure you’re getting the best deal.
- Understand the terms of the new loan before you sign anything.
What are the risks of a low doc commercial loan?
Here are some of the risks of refinancing a low doc commercial loan:
- You may have to pay closing costs.
- You may have to provide more documentation.
- You may have to meet stricter credit requirements.
Which commercial properties are accepted for a low doc commercial loan?
The type of commercial property that is accepted for a low doc commercial loan will vary depending on the lender. However, some common types of properties that are accepted include:
- Office buildings: Office buildings are a popular type of commercial property for low doc loans. This is because they tend to be stable investments and they often have a good rental history.
- Retail properties: Retail properties are another popular type of commercial property for low doc loans. This is because they tend to be in high-traffic areas and they often have a good cash flow.
- Industrial properties: Industrial properties are a good option for low doc loans if you’re looking for a property with a lot of space. This type of property is often used for storage or manufacturing.
- Multi-unit properties: Multi-unit properties, such as apartment buildings or condominiums, can be a good option for low doc loans if you’re looking for a property with a steady income stream.
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