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Plenty of sound businesses cannot produce current financials on demand. Returns are a year behind, the accountant is mid-way through a restructure, or last year’s numbers do not reflect this year’s trading. A bank stops there. An asset-secured lender starts somewhere else.
What is assessed instead
- The property. Title search, a rates notice, and a valuation at the level the LVR calls for.
- The existing debt. A current statement from the first mortgagee, showing the balance and that payments are up to date.
- Who can sign. Company search, trust deed, and ID for directors, trustees and guarantors.
- The purpose. A signed business purpose declaration. This is what keeps the loan outside consumer credit law. See what is a business-purpose declaration.
- The exit. The contract of sale, the refinance approval, the invoice or settlement the repayment depends on.
Why this is legitimate, not loose
Lending without income verification sounds careless until the structure is understood. The loan is short. The LVR is conservative, indicatively up to 65% combined. The repayment does not depend on monthly income at all, because interest is usually prepaid or capitalised and the principal is repaid from one event. The lender’s protection is the equity and the exit, and both are verified carefully.
When financials still come up
If the exit is a bank refinance, the bank will want financials, so a lender may ask whether they will be ready in time. If the exit is trading cash flow, recent BAS or bank statements help show it is real. And larger or longer facilities, such as a low-doc business loan, use lighter evidence like BAS and accountant letters in place of full returns. The differences are set out in low doc vs no doc business loans.
What it costs
Speed and light documentation are priced in. A caveat loan is dearer per month than a fully documented bank facility, and it is meant to be held for months. Used as a bridge to a cheaper, documented loan, the numbers work. Used as a long-term substitute for getting the books in order, they do not.
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Get matched with a funderFAQ
Is a no financials loan the same as no documents?
No. There are always documents: proof of ownership, identity, authority to sign, the business purpose declaration and the loan agreement. What is missing is income verification.
Will I be asked for BAS or bank statements?
Sometimes, particularly where the exit is trading cash flow or a bank refinance. They are used to sense-check the story, not to run a serviceability calculation.
Why do banks need financials and caveat lenders do not?
A bank lends for years and relies on income to be repaid. A caveat lender lends for months and relies on a specific event - a sale, refinance or payment - backed by equity in the property.