Low document machinery finance gives Australian businesses a way to fund machinery and equipment without always providing complete financial statements, tax returns or several years of trading history.
Instead, selected lenders can assess the application using recent bank statements, ABN details, credit history, industry experience and information about the asset being purchased.
The Asset Finance Shop (TAFS) arranges low doc machinery finance for Australian sole traders, small businesses and established operators through access to more than 80 bank and non-bank lenders. Our internal credit team reviews each application before a formal lender submission is made, helping identify options that suit the business, machinery and available documentation.
For straightforward applications, approvals can be available in as little as 24 hours once the required information has been supplied.
This guide explains how low document machinery finance works in Australia, who can qualify, what documents lenders may require and what can help strengthen an application.
Low document machinery finance is a type of asset finance that allows eligible businesses to apply for equipment funding without supplying the same level of financial documentation that may be required under a traditional full doc application.
A full doc machinery loan may require:
A low doc application may instead use information such as:
Low doc does not mean the lender skips its assessment.
The lender still needs to be satisfied that the business can afford the proposed repayments and that the machinery provides suitable security for the finance.
Low document machinery finance can suit a range of Australian ABN holders.
Sole traders may not always have the same level of financial reporting as larger businesses.
Selected lenders can assess an application using recent bank statements, ABN history, credit conduct and information about the work the machinery will perform.
A newer ABN may still be considered for machinery finance.
The lender may place more weight on:
An established business may be trading well even when its most recent financial statements have not yet been completed.
Strong bank statement activity and an established repayment history can support a low doc application through selected lenders.
A contractor adding a second excavator, skid steer, loader or other machine may already have a trading and repayment history that helps support the application.
The lender may consider existing machinery income and how the additional asset will increase capacity.
TAFS can arrange machinery loans across a broad range of industries.
New and used machinery may be financed through dealers, private sellers and auctions, subject to lender criteria.
The process generally begins with an assessment of the business before a formal lender application is made.
TAFS reviews the applicant's:
This helps determine which lenders may be suitable.
TAFS begins with a soft credit check that leaves no mark on the applicant's credit file.
Our internal credit team can then review the credit position before selecting a lender for formal submission.
Different lenders have different requirements for low doc machinery finance.
Some may be more comfortable with:
TAFS assesses the application against the criteria of more than 80 lenders.
The machinery finance can be structured around:
The repayment should suit both the business and the expected working life of the machinery.
Once a suitable option has been selected, the formal application is submitted to that lender.
This avoids unnecessarily sending the application to several lenders at the same time.
Once approved, the lender prepares the finance documents and completes its final checks.
After all conditions have been satisfied, the approved funds are paid directly to the machinery seller.
The exact requirements depend on the lender and application.
For an initial assessment, you may need:
Depending on the application, the lender may also request:
Machinery information is usually required once the asset has been selected.
This may include:
Your TAFS broker will confirm what the selected lender requires.
Not always.
That is the main reason businesses consider low documentation machinery finance.
Selected lenders may be able to assess the application without requiring complete annual financial statements.
Instead, they may use:
The lender still needs enough information to understand the business and determine whether the finance is affordable.
The required bank statement period depends on the lender and application.
Bank statements can help show:
Providing complete and current statements can help make the assessment more straightforward.
The lender wants to see the normal financial activity of the business rather than a short period that does not reflect how it usually operates.
Yes. Selected lenders will consider machinery finance for newer ABNs.
A new business may not yet have annual financial statements or a long trading history, so the lender can look at other parts of the application.
These may include:
For example, an experienced earthmoving operator starting a new business may have limited ABN history but several years of experience operating the same type of machinery.
That experience can form part of the lender assessment.
Yes. Industry experience can be particularly important where the business has limited trading history.
A lender may consider experience gained as:
The lender wants confidence that the applicant understands how the equipment will be used, what it costs to operate and how it will generate income.
A deposit is not required for every low doc machinery finance application.
Whether one is needed will depend on:
A deposit can strengthen the application by reducing the amount financed.
A trade-in may also be used as the business's contribution.
Potentially.
Selected applicants may qualify for finance covering the full purchase price.
The lender may be more comfortable providing full purchase finance where the business has:
Full purchase price finance is not guaranteed.
A deposit may still be required depending on the applicant and machinery.
The main finance product TAFS arranges for machinery purchases is a chattel mortgage.
Under a chattel mortgage:
A balloon payment can reduce regular repayments by leaving part of the finance amount until the end of the term.
The business may be able to claim the GST on the purchase price, along with eligible interest and depreciation deductions. Speak with your accountant about the tax treatment that applies to your circumstances.
Yes. Used machinery can be financed through selected lenders using a low doc application.
The lender may assess:
Older machinery may have fewer available lenders or shorter finance terms.
An inspection or valuation may also be required.
Yes. Selected lenders provide asset finance for machinery purchased privately.
The lender may need to verify:
Private sales usually require additional checks compared with dealer purchases.
TAFS can coordinate the information required between the buyer, seller and lender.
Yes. Auction purchases can be financed through selected lenders.
Pre-approval may be available before bidding, depending on the application.
This can help the business understand:
Final approval will depend on the machinery eventually purchased.
Auction settlement deadlines can be short, so arranging the initial finance assessment before bidding can help prevent delays.
Yes. Machinery attachments can often be included in the same facility when they form part of the purchase.
This may include:
The lender will consider the overall purchase amount and how the attachments relate to the main asset.
Yes. Established businesses can use low doc machinery finance to add equipment as they grow.
The lender may look at:
A good repayment history on the existing equipment can help strengthen the application.
Yes.
A business may use machinery finance to replace an ageing or unreliable asset.
Trade-in equity can sometimes be used as the contribution toward the new purchase.
The existing finance may also be paid out as part of settlement.
When considering an upgrade, compare:
The new machinery should make financial sense for the business beyond simply replacing an older asset.
Selected lenders may consider applicants with previous credit issues.
The lender may assess:
Previous credit issues can affect:
TAFS reviews the complete circumstances before selecting a lender for formal submission.
Selected lenders may consider machinery finance where the business has existing ATO debt.
The lender may want to understand:
An active payment arrangement and consistent payments can help demonstrate that the tax obligation is being managed.
Straightforward applications can be approved in as little as 24 hours once the required information is available.
Approval can take longer when the application involves:
Providing accurate information from the beginning can help reduce unnecessary delays.
A well-prepared application makes it easier for the lender to understand the business.
Complete statements give the lender a clearer view of normal trading activity.
Explain how long you have worked in the industry and your experience with the type of machinery being purchased.
Contracts, purchase orders and work source agreements can help show how the machinery will generate income.
The business will still need funds for:
The machinery repayment should leave enough room for normal operating expenses.
The purchase price and machinery specifications should make sense for the work the business performs.
Provide accurate details of existing loans, tax debts and other repayments.
This helps the application get assessed correctly from the start.
|
Factor |
Low Doc Machinery Finance |
Full Doc Machinery Finance |
|
Financial statements |
May not be required |
Usually required |
|
Bank statements |
Commonly used |
May still be required |
|
Tax returns |
May not be required |
Often requested |
|
Suitable for |
Sole traders, newer businesses and businesses without current financials |
Established businesses with complete financial reporting |
|
Lender assessment |
Uses current business activity and supporting information |
Uses full financial performance |
|
Used machinery |
Available through selected lenders |
Available subject to lender criteria |
|
Private sales |
Available through selected lenders |
Available subject to lender criteria |
|
Approval speed |
Can be fast when information is ready |
Depends on financial complexity |
Neither option is automatically better.
A full doc application can sometimes provide access to stronger pricing where the business has complete and favourable financial information.
Low doc finance provides another pathway where full financial statements are not available.
TAFS reviews the business, ABN history, industry experience and machinery requirements.
TAFS begins with a soft credit check that leaves no mark on the applicant's credit file.
Our internal credit team reviews the application before selecting a lender.
The scenario is assessed against the criteria of more than 80 lenders.
The amount, term, deposit, repayment and balloon are considered based on the business and machinery.
The formal application is submitted to the selected lender.
TAFS coordinates the lender requirements, finance documents and payment to the machinery seller.
Before applying for low document machinery finance, ask:
Low document machinery finance allows eligible businesses to apply for equipment funding without always providing complete financial statements or tax returns.
Selected lenders may instead use recent bank statements, ABN information, credit history and other supporting business information.
Potentially.
Low doc finance may be available where the lender can assess the business using alternative information such as bank statements, trading history and credit conduct.
Yes. Selected lenders consider newer ABNs.
Previous industry experience, current work, bank statements and available working capital can help strengthen the application.
Yes. Sole traders can apply for machinery finance.
Low doc options may be available where complete financial statements are not available.
Not always.
A deposit may be required depending on the applicant, machinery, finance amount and lender criteria.
Yes. Used machinery can be financed through selected lenders.
The machinery's age, operating hours, condition and market value will affect the available options.
Yes. Private-sale machinery finance is available through selected lenders.
Additional seller, ownership and equipment checks may be required.
Yes. Selected lenders can finance auction purchases.
Pre-approval may also be available before bidding.
Potentially.
Selected lenders consider applications with previous credit issues based on the complete circumstances.
Potentially.
Selected lenders may consider businesses with ATO debt, particularly where the obligation is being managed and the business has sufficient cash flow.
Straightforward applications can be approved in as little as 24 hours once the required information has been supplied.
More complex applications can take longer depending on the business, machinery and lender requirements.
TAFS can assess your business, available documentation and proposed machinery purchase before comparing suitable asset finance options through access to more than 80 lenders.
Start with a no-obligation assessment and a soft credit check that leaves no mark on your file. Contact The Asset Finance Shop or apply online at www.tafs.com.au.
The Asset Finance Shop (TAFS) is a commercial asset finance brokerage based in Sydney.
Information on this page is general in nature and doesn't take your personal circumstances into account. Speak to a TAFS broker for options tailored to your business, and to your accountant regarding tax treatment.