Full Doc, Alt Doc, and Low Doc Loans: Your Options as a Self-Employed Borrower
Running your own business brings freedom, flexibility, and opportunity, but it also brings complexity when it comes to lending. Many business owners discover while their business is thriving, their paperwork does not always tell the full story, especially when it is time to apply for finance. This is where understanding your documentation options becomes essential.
Full Doc Loans: The Gold Standard
A full documentation loan is considered the lowest risk option for lenders. It requires the most complete financial information, usually including:
Two years of business financial statements (though one may be used in isolation)
Two years of personal and business tax returns
Up to date BAS and ATO payments
Because full documentation loans provide a clear picture of income and performance, they generally attract the most competitive interest rates and widest choice of lenders.
If rate and long-term structure are important to you, keeping your financials current is the best way to maintain flexibility and secure the strongest terms.
Alt Doc Loans: When Your Financials Are Not Quite Ready
Sometimes your business performance is solid, and your ability to generate revenue is high but your tax returns or financial statements are not yet finalised. In these cases, an alternate documentation loan can help bridge the gap.
Alt doc lenders may accept a combination of documents such as:
Business bank statements showing consistent turnover
BAS statements
Accountant declarations verifying income
These products are designed for self-employed borrowers who need finance now, but whose documentation is still being prepared or lodged. The rates are usually slightly higher than full doc lending, but the trade-off is flexibility and faster turnaround.
Low Doc Loans: A Short-Term Solution
Low documentation loans are designed for specific situations where limited financial evidence is available. This could be during a period of business transition, restructuring, or following a strong year of growth that has not yet been reflected in formal financials.
These loans often rely on declared income supported by limited verification, and while they do come with higher rates and stricter terms, they can be an important short-term solution to:
Purchase a property
Access equity for business growth
Consolidate or refinance existing lending
Once your financials are up to date and stable, you can usually refinance into a full documentation facility at a lower rate.
Choosing the Right Option
The right option depends on your stage of business, your cash flow position, and your goals. For some, the focus is on securing the best possible rate, which means preparing full financials. For others, timing is more critical; an opportunity to buy a property, expand the business, or release equity may require action before the books are complete.
A strategic broker, such as the Imperium Finance team, will help you map out both the immediate and long-term plan so you can move forward now while setting yourself up for a stronger lending position in the future.
From Strategy to Structure: Your Next Steps
Being self-employed should never be a barrier to finance. Whether your financials are complete, in progress, or still being finalised, there are solutions available.
The key is to choose the right broker to assist you in selecting a product for your circumstances and to treat lending as part of your broader business strategy. If you are a business owner looking to purchase, invest, or access equity, contact us today for a confidential discussion about your finance options.