Why Low-Doc loans need ABN, and if I have more than one, which one to use?

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dave.murphy
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@dave.murphy
Join Date: 2008
Post Count: 9
February 22, 2008 - 2:26 am
Does anyone know why Low-Doc loans need ABN?
Which information does the lender look at?
If I have more than one ABN that have been around for more than 2 years, which one should is the best to use to get higher chance of approval? (i.e. busines abn, property trust abn, etc)
Pudestcon
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@pudestcon
Join Date: 2005
Post Count: 64
February 23, 2008 - 1:00 am
I'm no expert but my understanding is that your ABN is required to show the lender that you are in business which is one of the reasons Lodoc loans was set up. (Because business people find it hard sometimes to show a regular income) Another good idea is to be registered for GST because it gives the lender an indication of your income: you don't have to register for GST if you earn less than $75,000 so if you are registered it is safe for the lender to assume you earn more than $75,000 and therefore you are probably in a better position to service the loan.
Pud
Pudestcon
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@pudestcon
Join Date: 2005
Post Count: 64
February 23, 2008 - 1:02 am
I also meant to add that I would use the ABN for the income producing business as I would see that as being more credible than an ABN for property investing.
Pud
Richard Taylor
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@qlds007
Join Date: 2003
Post Count: 12,024
February 23, 2008 - 5:20 am
Just to correct an earlier post.
You are required to be GST registered if you turnover more than $75,000 Per Annum not if you earn more than 75K.
As has been stated you are required to register for an ABN if you are in business.
Richard Taylor | Australia's leading private lender
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
February 23, 2008 - 12:01 pm
Many lenders will only lend to self employed, on low docs, and the best way to prove self employment is through an ABN. ABN's can be checked at http://www.abr.gov.au and this will show date of registration and date of GST registration (if any). There are some low doc lenders out there that do not require an ABN.
The ABN doesn't have to be for the entity purchasing, but could be any ABN for a related entity. eg. you may have a new company/trust buying which had just been set up, and prove your self employment by showing a business ABN from a few years ago.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au