Car Loans for Sole Traders
If you’re running your own business as a sole trader, we understand you’ve got a lot of plates to spin and balls to juggle. We want to help make the car finance process as easy as possible for you, giving you the time to focus on everything else you need to do.
As a sole trader with a small business, you may find yourself in a position with low documentation. Don’t panic – car loans for sole traders are achievable, and we’ll talk you through the steps.
We're specialists in car loans for sole traders. Find out how we can help you.
Why are car loan requirements different for sole traders?
When applying for car loans, most borrowers will need to show their lender proof of income. This is usually in the form of regular payslips from your employer.
Sole traders who are running their own business will not have regular payslips and may not have a stable, regular income at all. If the business is new, it’s also unlikely that you’ll have the tax returns or BAS records to show in place of these. Don’t worry – there are other types of documentation that you can provide to your car finance lender.
What documents do you need to provide as a sole trader?
It will be harder for you to show proof of a regular income if you own a business as a sole trader. If you do have tax returns or BAS reports from the last few years, these would be helpful for a lender to see. Additionally, bank statements for your business showing income and expenses will also be useful.
You should have all the standard documentation needed for car loans – such as proof of identification, proof of address, and proof of insurance. Make sure that these are available when your lender needs them to help avoid unnecessary delays.
Showing evidence of previous loans that you have paid back in full or documents such as a business plan or projected profits can also be useful for lenders to see.
What are the risks of car loans for sole traders?
As a sole trader, it’s much harder to show the lender proof of income. It’s possible that they’ll see you as a higher risk than an employee in a larger company who can produce regular payslips.
You should be wary of car loans that have higher interest rates – speak to us if you’re unsure of whether your rate is fair for your situation or not.
You also need to be aware that you may be using your business or assets as collateral for the car loan. This means that it’s really important you always make your repayments on time to avoid the risk of assets being repossessed. However much you’ve got on your plate, always be organised about making repayments.
Check if there are any additional fees connected with your car loan. It’s always good to fully understand everything you’ll be expected to pay back each month so that you aren’t left with unpleasant surprises.
Choose the right lender for car loans for sole traders
It can be overwhelming when you start searching for lenders who provide car loans for sole traders. There seem to be so many lenders out there and when you go online, it’s easy to spend hours comparing lenders and the options that they’re offering.
The best approach is to ask the experts. We have decades of experience working with over 25 Australian lenders. This means that we can save you both time and money by directing you to the most trustworthy and appropriate lenders for your financial situation.
Give yourself the peace of mind that you’re getting the best solution. You can compare car loan rates here to know your options or get a quick quote to get an idea of how much your monthly repayments will be.