February 23, 2021
You asked, we answered.
Can Sole Traders Get Car Loans?
In short: Yes, with appropriate financial documents.
But there are some things to consider
With all forms of finance, borrowers need to provide proof of income so lenders can see they can make repayments without struggling.
When you’re running your own business, dashing to different job sites and trying to make sure your customers are satisfied, organising loans can be tough. That’s why OnlineLoans offers a 100% online process, allowing you to do it at your own pace.
How can sole traders get car loans with no payslips?
These are generally the main difference between a car loan for a regular employee and a sole trader.
PAYG borrowers simply need to forward on recent payslips proving their income. This is not the case for sole traders.
A sole trader will typically need to supply the following:
BAS reports from the last few years
Sometimes bank statements are required too.
But what if it’s a new business? Can sole traders get car loans then?
This is more common than some people might realise. A sole trader who’s recently started up their own business and needs to purchase a suitable vehicle with a loan.
Lenders often simply need to see experience within the same industry. This could be previous employment or work records showing your years of work. For example, a plumber deciding to go out on their own. They’ll have past industry experience from previous employers.
Documents showing business plans or projected profits can also be useful to lenders.
What other documents do sole traders need?
You’ll typically need these documents for car loans:
- Photo ID and/or Medicare card
- Proof of address
- Privacy consent
Sometimes, lenders require additional documents like a rental ledger, previous loan statements or references. Often, they are requested on a case-by-case basis.
Tip: Have your documents ready to avoid any delays.
Are there any extra risks for sole traders?
As it can be difficult to prove stable and consistent income for some sole traders, lenders can view this as risky and therefore rates might be higher.
OnlineLoans works with a large panel of lenders and can offer a range of options to compare.
Furthermore, secured car loans mean that the loan is ‘secured’ by assets as collateral. In other words, lenders can take these assets if repayments aren’t made. Fortunately, this is usually the last resort.
If you ever find yourself struggling to make repayments, lenders are there to help. Often, you can readjust terms to make things easier well before even considering repossessing assets.
How about the benefits?
As a self-employed borrower, you’ll have the chance to apply for a commercial car loan. The vehicle must predominantly be used for business purposes and, if so, commercial loans can attract lower rates and simpler processes.
Other questions and answers that may help
The next step
To see what your rates and repayments look like, get a quick quote. These will allow you to consider various options and, upon your selection, you can submit your online car loan application to get the ball rolling.
Stay tuned for more Q&A with OnlineLoans as we clear up car loan confusion.