How does a Low Doc Equipment Finance Work?

Low Doc loans can be used for the purpose of financing trucks or heavy equipment when no financial statements are requested from clients Accountant.

We understand that clients don’t always have Accountant prepared financial statements finalised when looking to undertake truck finance or any other form of heavy equipment finance.

As this is the case, Heavy Vehicle Finance has developed some really great low doc funding options for our customers. The different low doc options are as follows;

Replacement Policy

This product is used when the applicant is trading in an existing item of equipment for a brand new or newer machine.

Features of the Replacement Policy

  • Monthly payments on the new loan to not increase by more than 25% of the original loan repayment
  • Good payment history on existing loan contract to be evident
  • Goods to be purchased through a dealer (no private sale)
  • Applicant to have no adverse credit history
  • No upfront deposit required

Benefits of the Replacement Policy

  • Great base rate offered with this type of funding
  • Very quick approvals offered as the application process is very simple
  • Settlements turnarounds are immediate as very little paperwork is required for settlement
  • Clients can source finance approvals for farm machinery finance even if they have a slow season due to adverse weather conditions

Example of the Replacement Policy

  • Existing farming customer of ours was needing to upgrade to a new tractor as the existing one was starting to give them problems. They had a bad year with drought and the current years financial statements did not service the deal
  • As client had good payment history on the existing tractor loan we made the deal fit under our replacement policy and provided client with a loan approval the same day
  • Purchase price of new tractor was $350,000
  • Finance Type – Chattel Mortgage
  • Term – 60 months
  • Balloon – 40% (we applied a balloon amount of 40% so that the monthly payments did not exceed the original loan repayments by 25%)

Outcome

  • Client was very happy with this outcome as their net profit was being eroded by the older tractor that was starting to incur ongoing repairs
  • Customer had the comfort of operating a new tractor with manufacturer’s warranty
  • Quick turnaround time for the customer (the whole process only took two days to finalise, which meant client was able to secure a really good trade price on his existing tractor)

Low Doc up to $500K

This product is used when the applicant is looking to purchase an additional item of capital equipment for their fleet.

Features of the Low Doc up to $500K

  • Maximum facility limit of $500K
  • Goods must be purchased through a dealer (no private sales)
  • Goods to be no older than 5 years old at time of purchase
  • We must obtain the most recent business activity statement
  • We also must obtain the clients tax portal on their integrated client account to ensure that gst is paid and up to date.
  • Good payment history on similar equipment finance loan contract to be evident over the last 12 months
  • Applicant to have no adverse credit history
  • At least one director to hold equity in property
  • ABN of applicant to have been active for minimum of 3 years
  • Goods to be no older than 9 years old at time of purchase

Benefits of the Low Doc up to $500K Policy

  • Allows an applicant to purchase an additional item of capital equipment even in the event that their accountant has not completed the current years financial statements
  • Competitive interest rates can be offered to clients under this policy
  • Settlement turnarounds are very quick allowing a customer to secure a good price on the machine they are looking to purchase
  • No need for deposit as 100% of the purchase price can be financed

Example of Low Doc up to $500K

  • Truck driver called us as he was having difficulties obtaining truck finance to purchase a new Freightliner Coronado. His current bank had declined the deal based on the fact his current financials could not service his current and proposed loan facilities
  • One of our specialist finance consultants took the application over the phone, with our credit manager approving the deal under our low doc up to $500K policy by close of business. Client had good payment history on a Caterpillar Excavator (with Caterpillar Finance) which meant we were able to obtain a payment reference on an equipment loan
  • Purchase price of new prime mover $334,500
  • Finance Type – Chattel Mortgage
  • Term – 60 months
  • Balloon – 30%

Outcome

  • Our approval meant they were able to secure an additional work contract that would increase turnover by approx $40k per month – even though his existing bank had declined the deal
  • As our limit was up to a limit of $500K, client still had an additional $165,500 worth of funding still available. As this was the case, client decided to purchase a low loader trailer of which was going to increase his turnover by an additional 25%

Low Doc for Older Trucks and Heavy Equipment

This product is used when the applicant is looking to purchase older equipment that will not fit under our other two low doc products.

Features of the Low Doc for Older Trucks and Heavy Equipment Policy

  • We require last three months bank statements on clients business trading account
  • Deposit required or collateral security over unencumbered equipment
  • Adverse credit considered on a case by case basis
  • generally maximum facility limit is $200K – but is considered to go beyond $200K on a case by case basis
  • both private and dealer purchases acceptable
  • rates are higher than other forms of funding based on the increased risk profile of the applicant and the age of the goods being purchased

Benefits of the Low Doc for Older Trucks and Heavy Equipment Policy

  • gives client the ability to finance equipment that is older than 5 years old at time of purchase
  • this is a flexible form of funding and is available to most businesses operating in the transport and heavy equipment industries
  • The big banks do not come anywhere close to offering this type of product which gives us a real competitive advantage over the big four banks

Example of Low Doc for Older Trucks and Heavy Equipment Policy

  • Client had recently started a concrete pumping business and had only been trading for 6 months. They required a second pump as they had been offered additional work from a builder that they had been working for
  • We requested the last three months bank statements on their business trading account and provided a finance approval 4 days later
  • Purchase price of Everdigm Concrete Pump $175,000
  • Deposit – $35,000
  • Finance Type – Commercial Hire Purchase
  • Term – 60 months
  • Residual – NIL

Outcome

  • Client was able to purchase an additional concrete pump after only 6 months of trading
  • Given the fact that this finance product facilitates the purchase of older equipment, client was able to source a concrete pump that was priced in the $350,000 price range
  • Customer was thankful we could assist, when they had absolutely no other funding options available

Want to ask more questions about our Low Doc Equipment Finance Products.

Our different low doc products give customers in the transport and heavy industry, access to loan products that are not offered by the big four banks. We can nine times out of ten make it happen for our customers and have a very fluid approach to assessing deals that fall within the Low Doc framework.
To discuss our Low Doc products in further detail, please call us on 1300 788 740 or simply input your details into our online pre-approval page for instant truck finance approval.

Who would use a Low Doc Equipment Finance Product?

A Low Doc Equipment Finance Product would be used when a business seeks finance for capital equipment, even when financial statements have not been completed by their accountant. Or alternatively, when the current years financial statements are down on the previous year due to a bad cropping season or severe drought.

NEED FINANCE FOR A HEAVY VEHICLE FAST?

DON’T WASTE TIME

GET APPROVED ONLINE NOW!

or Call 1300 788 740