06 Aug Can I get finance for a brand new ABN?

Yes and no. Depends on the situation.

For a “low doc” loan the first condition is usually that the ABN needs to have been registered for more than two (sometimes more) years.

Also, even if we are doing a “full doc” loan with financials. If the company is brand new, chances are there are no financials to give.

Every situation is different but they usually fall into one of the following categories.

Restructure of ABN.

Sometimes for whatever reason and sole trader might turn into a company, or a company might turn into a trust.

It’s usually because a business is growing (which is a good thing). So as long as we can show “continuity” then it is usually still accepted under low doc.

Note that if there is a “significant” change in directors / shareholders, this would not apply. The only exception would be if someone passed away.

Business is old, ABN and owners are new.

If the business itself has been around for decades and has recently been sold to a new owner we can look at it but not under low doc.

We’d need the financials of the previous entity that was running the business.

It’s easier than you think to get financials in this situation. They are usually already on hand because it’s what the new owner used to decide whether or not to buy the business.

Industry experience

This is the hardest way to get a deal approved. We need to show that the client knows what they are doing because they have done it previously.

Quality of industry is important here. Experience as a veterinarian will hold more weight than experience running a fish and chips shop.

Some financiers have “low doc” loans specifically for this type of application. If they do it usually means they are a tier 2 lender and have some pretty hefty rates.

Tier 1 financiers will still look at the deal but sparingly.

Other factors that help

None of the above are a guarantee for an approval. So the more of below we can get, the better.

Property ownership: We’re not going to take security, but a property owner is someone we want to deal with over a non-property owner. Owner of the installation address is even better.

Lend size: Generally, the smaller the lend size the better, but sometimes when it is too small it has the opposite effect. Banks are very judgemental of people who need to borrow small sums of money.

A good credit reference: Good payment history trumps everything else. But it needs to be for the right thing, a loan preferably, not their Netflix subscription.