If you’re self-employed, you enjoy the advantages of independence and the sense of pride in a job well-done. Your services may be sought-after, and your business may be very profitable, so why should it be so hard to get finance for your new vehicle?
In general, finance is harder to secure if you have a fluctuating monthly income and are unable to present an employee payslip from your company. And if your business is new, it may be even harder, no matter how great your confidence in the future.
It doesn’t have to be this way, however, and there are ways of securing a car loan when you work for yourself. Here’s some advice for making the process easier.
- Before you apply for finance, apply for an ABN
Your Australian Business Number identifies your business as valid. Individuals can also register for an ABN. Once you have this number, it can be easier to secure finance.
And, provided you have an ABN, if your car is used to conduct your business, you can claim the costs – including loan interest rates – as tax deductions.
- What if you haven’t lodged a tax return?
Regular tax submissions make it easier to secure finance. If you haven’t lodged a tax return recently, getting a car loan may be harder, but not impossible.
Perhaps you are getting paid regularly, small amounts but aren’t spending much on business expenses. In this case, lenders can use alternative verifications by assessing your bank statements.
- Do you have spare cash or assets to leverage?
If you have some spare cash, providing a larger deposit will help you to secure a car loan. Your chances are also improved if you own property or if you’re regularly paying off a mortgage.
- What is your credit rating?
If there are no defaults on your credit file, this will improve your chances of getting a car loan. And if you have already paid off a previous car or bike in the past seven years with a good payment history, this will also help.
Don’t try to overstate your income when applying for a car loan. It could sabotage your application. Rather, give as much detailed information as you can and get in touch with car finance experts who can help you explore your options.