For many of the 2.6 million businesses trading in Australia (according to ABS data from 2024), having access to a car is essential. Whether it’s a little hatchback to help you visit clients or a large van to transport your equipment, they can allow you to keep the lights on. However, the length of time your ABN has been active will be one of the biggest factors when it comes to your vehicle loan options.
How can I get a car loan with an ABN?
If you don’t have all the documents you need, you can apply for a low doc car loan with your ABN. This is simply a car loan with different documentation requirements for business owners in this position. Here are the documentation requirements for a low doc or ABN car loan:
- ABN registration: this can be as early as a Day 1 ABN. Your lender or broker will conduct a search, so you won’t need to provide any documents beyond the number itself.
- Personal identification: you’ll have to prove your identity through a driver’s licence or passport.
- Business asset and liability information: details on any existing vehicles, equipment or property in your business’ name, as well as other loans and debts.
- Personal asset and liability information: your lender will also want to know about your financial position, namely whether you’re a property owner.
- Business bank statements: these may be required, but not always.
- Business Activity Statements (BAS): also may sometimes be required, depending on your profile.
- Revenue forecasts: for newer businesses in particular, some lenders may require revenue and profit forecasts when considering your application.
If you’re a property owner and your ABN has been active for 12 months or more, you’ll generally only need your personal ID and asset details to be approved. If you aren’t a property owner but are otherwise in the same position, the same may apply with the requirement for a 10% to 20% deposit.
In other cases, BAS and bank statements may be required. Ultimately, it comes down not only to your business’ situation but also your lender’s criteria. When you apply with Savvy, we’ll match you with the commercial lender and loan product best suited to your business’ needs from our trusted panel.
Why apply for a car loan with Savvy?
What are the eligibility criteria for ABN car loans?
To qualify for a car loan, you must meet the following criteria:
- You must be at least 18 years of age
- You must be an Australian citizen, permanent resident or living on an accepted visa
- You must have an ABN registered in your name
- You must use your vehicle for commercial purposes at least 51% of the time
- Your business may need to be registered for GST (but not always)
- You must meet the documentation requirements listed previously
- Your business must comfortably be able to afford its repayments
These criteria capture a broad spectrum of businesses, so you can get in touch with us today to kick your application into gear.
ABN car loan interest rates
Applying for a low doc or ABN car loan doesn’t necessarily mean your interest rates will be higher than on a regular chattel mortgage. For example, property owners with extensive trading histories can benefit from lower documentation requirements and lower rates.
Some of the factors impacting ABN car loan interest rates are:
- Business credit history: your business’ credit score and history provide lenders with an indication of its reliability in servicing debt. Few or no blemishes can net you a better rate.
- Trading history: displaying a track record of positive trading history and profitability will give lenders more confidence that you’ll be able to manage your loan.
- Asset backing: having significant assets like property owned either by you or your business will typically lower your interest rate.
- Personal credit history and finances: if your business is still in its infancy, lenders will lean on your personal financial situation to determine the terms of your rate.
How much can I borrow with an ABN car loan?
As with other car loans, you’ll be able to borrow up to 100% of your vehicle’s purchase price (and potentially more if you include on-road costs in your loan). However, as mentioned previously, business owners who either don’t own property or have only been trading for a short time may be required to pay a deposit of between 10% and 20%.
Another major factor when determining your business’ borrowing power is its revenue and profitability. If you can show that you’re able to comfortably cover the loan payments, that’ll go a long way to helping you get approved for your loan.
Finally, for businesses with little or no trading history, lenders may only be willing to lend a smaller amount compared to one with an extensive record of repaying commercial loans. Your time in business will have a significant say in whether you can be approved for the loan you’re after.
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The tax benefits of an ABN car loan
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Loan interest and fees
The interest and fees paid on your vehicle loan are claimable as a tax deduction.
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GST on car purchase
You can also claim the GST paid on the purchase of the vehicle itself, effectively providing a built-in discount.
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Depreciation
As time goes on, your car will decline in value. This loss in its resale price is tax-deductible as well.
Note: each of the above expenses is only tax-deductible up to the business portion of your car’s usage. For example, a car that is used for personal purposes 25% of the time would mean you could only claim up to 75% of the interest, fees, GST and depreciation paid. Speak to your accountant about specifics on what your business can and can’t claim.
How to apply for an ABN car loan through Savvy
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Fill out our simple online form
This should only take you a few minutes to complete. Tell us about yourself, your business and the loan you’re after.
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Provide any additional documents
We may need further documentation to verify your identity or financial information, so be prepared to provide these to your consultant.
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Speak with your Savvy consultant about your options
Your consultant will get to work comparing the available options from our lender panel and will call you to discuss the next steps.
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Have your application prepared and submitted
If you’re happy with it, we’ll prepare and submit your formal application to your lender for approval. This can happen as soon as within 48 hours.
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Receive formal approval and sign off on the loan
We’ll handle the settlement process for you. All that’s left is for you to sign off on all the final forms and the car can be transferred into your business’ name!
