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For those of you who are self-employed, business may be great but proving your income on paper might not be so easy. You may even have a healthy cash-flow and years of consistent work, but if your tax returns don’t reflect the true position of your financial health, it could be difficult getting a loan from a bank.
This is where Hodgestone Finance and no tax return loans can help. These loans are designed specifically for borrowers who operate outside the standard PAYG employment model. The no tax return model allows sole traders and self-employed individuals to access finance without needing to produce multiple years of tax returns as proof of income. Instead, lenders assess you on alternative documentation, such as BAS, business bank statements or a letter from your accountant. They are able to get a better read on your actual earning capacity.
At Hodgestone Finance, we work with a broad panel of lenders who understand the realities of self-employment. If you've been knocked back by a bank or told your tax returns aren't sufficient, there are still strong options available to you.
What Defines Self-Employed?
In simple terms, being self-employed means earning a living directly from your own business, trade or profession, rather than working as an employee for someone else. This includes freelancers, contractors or business owners who manage their own schedules, taxes and clients.
Freelancers are often in the marketing field, such as copywriters or social media managers, working for multiple clients on a project-by-project basis.
Contractors are often considered tradespeople, such as plumbers or electricians, or even an IT consultant. Often they have a company vehicle as part of their business.
Sole traders are generally considered those people who run their own bricks and mortar businesses, or perhaps an online shop with no shop frontage.
Self-employment brings with it flexibility to work when and wherever you wish, and control over who you take work from. You manage your own income, issuing invoices and paying tax and super from those invoices.
You don’t get any employee benefits such as sick leave or personal leave and no employer-sponsored superannuation contributions.
What Is a No Tax Return Loan?
A no tax loan, often called a ‘low doc loan’ is a financing option often suitable for self-employed people. It allows borrowers to verify income in different ways to what the banks want, which allows private lenders to loan them money when they need it.
Due to the higher perceived risks associated with the borrower, interest rates with no tax return loans are often higher than standard loans from the banks.
Private lenders may only cover up to 80% of a property’s value, which means the borrower will need at least 20% of the property’s value. Private lenders typically use their own valuers to assess how much a property is worth, in regards to security.
Often a borrower must have an ABN registered for at least 6 months.
What Documentation Do You Need to Get a No Tax Return Loan?
Without the need to produce tax returns from previous years, you need alternative documentation to be eligible for a low doc loan. These include:
- Proof of income: 6 months of bank statements showing your business activity or 6 months worth of BAS.
- A letter from your accountant: A letter of declaration from your accountant confirming your income or financial position.
- Business details: You will need proof of registration of your ABN, with at least 6 months of registration, and any registration for GST.
- Have a good credit score (not a deal breaker, but it will help): A high credit score can often secure you better rates with a lender.
- Deposit/equity: Generally, lenders will lend up to 80% of the property’s value, leaving the borrower to put up the remaining 20%.
What Can You Use a No Tax Return Loan For?
A no tax loan is primarily used by businesses and those who are self-employed to purchase property, buy vehicles or fund business growth.
Business growth can include purchasing inventory or equipment that benefits the growth of the business.
Borrowers also can use these types of loans for debt consolidation. Paying out high interest debts in multiple places, and having just one loan makes good financial sense.
Is a No Tax Return Loan Right for You?
Being self-employed shouldn’t be a barrier to the finance you need. If you need to purchase property or invest in your business, no tax return loans exist for you because the traditional lenders don't account for the realities of running your own business.
If you have a registered ABN, a consistent record of business activity, and the right supporting documentation, you may be in a stronger position than you think.
The key is working with a broker who understands your business and the business of being self-employed. Hodgestone Finance has access to a panel of lenders who specialise in low doc loan solutions. We regularly work with sole traders and self-employed borrowers to find finance solutions that work for their situation, not against it. We’ll assess your situation and circumstances, match you with the right lender and guide you through the documentation process from start to finish.
Are you ready to explore your options? Contact the team at Hodgestone Finance today for an obligation-free conversation about no tax return loans.
FAQ
Q: What's the difference between a low doc loan and a no doc loan?
A low doc loan requires some alternative form of income verification, such as bank statements or a BAS statement. A no doc loan requires little to no income documentation at all and is typically offered by private lenders for short-term or commercial purposes. No doc loans generally carry higher interest rates to reflect the increased lender risk.
Q: Who is eligible for a low doc loan?
Low doc loans are generally available to self-employed individuals, sole traders, freelancers, contractors, and small business owners who have an active ABN typically registered for at least 6 to 18 months and can demonstrate consistent business activity through alternative documentation.
Q: How much can I borrow with a low doc loan?
Most lenders will lend up to 80% of a property's value (LVR) on a low doc basis, meaning you'll generally need a minimum 20% deposit or equivalent equity. Some lenders may go higher depending on the loan type and your overall financial profile.
Q: Can I use a low doc loan to purchase an investment property?
Yes. Low doc loans can be used for residential property purchases, investment properties, commercial property, business equipment, and debt consolidation depending on the lender and loan product.
Q: Can I refinance an existing loan on a low doc basis?
Yes. Refinancing is available on a low doc basis for eligible borrowers. This can be a useful way to consolidate debt, access equity, or move to a more competitive rate without needing to provide full tax documentation.
Q: What types of loans does Hodgestone Finance offer?
Hodgestone Finance offers a comprehensive range of loan products including home loans, low doc home loans, commercial property loans, low doc commercial loans, construction loans, equipment loans (trucks, cranes, excavators, farm machinery), short-term loans, bridging loans, unsecured loans, no doc commercial loans, and private lending solutions.
Q: Is Hodgestone Finance a licensed finance broker?
Yes. Hodgestone Finance holds Australian Credit Licence No. 482350 and is accredited with the Finance Brokers Association of Australia (FBAA).
Q: What areas does Hodgestone Finance service?
Hodgestone Finance provides finance solutions nationwide, with particular focus on Melbourne, Sydney, Brisbane, Adelaide, Canberra, Gold Coast, Sunshine Coast, Geelong, Bendigo, Gippsland, Shepparton, and the Mornington Peninsula, however also has the ability to assist with loans around the rest of the country
Q: Can Hodgestone Finance help if I have been declined by a bank?
Yes. Hodgestone Finance specialises in finding solutions for clients who have been declined by traditional banks, including those with complex financial situations, self-employed borrowers, and clients requiring non-bank or private lending options.
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