Car finance when you're self-employed
Perth has a large self-employed trade base, and a bank's income assessment is built around a payslip that sole traders and contractors do not have. That is a documentation problem, not a creditworthiness problem, and there are lenders set up for it.
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Get my quotesFull doc and low doc, and which one you need
A full doc application uses two years of tax returns and financials. If you have them and they show solid, consistent profit, this is the path to the sharpest rates — you are being assessed on the same evidence as a salaried applicant, just presented differently.
A low doc application substitutes other evidence: BAS statements, business bank statements, an accountant's declaration. It exists for people whose returns do not tell the whole story — a newer ABN, a recent expansion, or a year where legitimate deductions made the taxable figure look thin. Low doc generally prices higher, because the lender is accepting less certainty.
The trap is assuming you need low doc because you are self-employed. Plenty of tradies with two clean years of returns are full doc candidates and should not be paying a low doc premium.
How long your ABN has been active
ABN age is one of the first things assessed. Two years or more opens up most of the market. Between one and two years narrows it, but a good number of lenders will still look, particularly if you worked in the same trade as an employee beforehand.
Under twelve months is genuinely difficult. Not impossible — a larger deposit, a strong credit file, or property ownership can carry it — but expect a shorter list of lenders and a higher rate. If you are close to the twelve-month mark and the purchase is not urgent, waiting can be worth real money.
The deductions problem
There is a structural tension for every self-employed borrower. Your accountant works to minimise taxable income. A lender assesses you on taxable income. Do the first job well and you make the second harder.
This is precisely what low doc products exist to address, and it is worth being upfront about it. If your last return shows $45,000 taxable on a business turning over considerably more, say so — with BAS and bank statements to back it. An assessor who understands the context can work with it. One who sees only the return cannot.
What to have ready
Self-employed applications move faster when the paperwork is assembled up front:
- ABN and how long it has been registered, plus GST registration status
- Two years of tax returns and financials if you have them
- Recent BAS statements — usually the last four quarters
- Business bank statements, typically three to six months
- Details of existing business finance, equipment leases or overdrafts
Common questions
How long do I need an ABN before I can get finance?
Two years opens the widest choice. Between one and two years is workable with a reasonable number of lenders. Under twelve months is hard but not automatically a no, particularly with a deposit or property behind you.
Can I get finance without tax returns?
Often yes, through a low doc product assessed on BAS, business bank statements or an accountant's declaration. Expect a higher rate than a full doc application.
Does buying through the business change anything?
Yes — it usually means a commercial loan or chattel mortgage rather than a consumer car loan, with different tax treatment and different regulation. Your accountant should confirm the right structure.
My taxable income looks low because of deductions. Is that a problem?
It is a common situation and there are products built for it. Provide BAS and bank statements alongside the return so the assessor can see actual business activity rather than just the taxable figure.
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