Can You Get a Business Loan
With Less Paperwork?
No Doc business loans are NOT possibile, period. When trying to get a business loan, at a minimum you will need to provide an application and business bank statements. There are business loan alternatives that require less documentation such as reduced (or low) documentation loans and merchant cash advances that may only ask for business bank statements. If you can't provide business bank statements then credit cards are the only alternative to business loans that may provide you business funding without having to provide documentation other than an application.
Common reasons why a business is searching for a Reduced Doc Business Loan
- Because they can't provide business bank statements
- The bank statement cash flow doesn't support business funding
- Time is of the essence and the business owner doesn't have the time of a lengthy application process.
If you don’t fit into one of those three categories, then you should seriously consider other business funding products that exist in the business finance marketplace.
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What Types of Reduced-Doc Business Loans Are There?
Stated Income Business Loans
Stated income loans do mean that you may have to provide paperwork, but you can “state” without proving your personal income from the company. There are many products that are stated income, such as short-term options, Business Cash Advances, no doc business line of credit and Merchant Cash advances. Invoice financing doesn’t even ask you to state your income as a small business owner. Sometimes business cards, in rare circ*mstances, may ask not only to state income but prove it with verification.
Low Doc Business Loans (also known as Reduced Doc)
Low Doc or Reduced Doc refers to financing that will require minimal company paperwork such as bank statements and/or merchant processing statements but rarely ask for financial statements like tax returns, profit & loss, balance sheet, A/R, or A/P. If you are seeking a no doc business loan for your startup or small business, this might be one of the best options for you.
Reduced-Doc Loan Programs have loans that can be used for, but are not limited to;
- Cash Flow
- Advertising/Marketing
- Equipment
- Inventory or supplies
- Hire new employees
- Emergency Cash infusions, such as Emergency relief for accounts receivable issues
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What are the Pros and Cons of a Reduced-Doc Business Loan?
Low Documentation business loans can lead to eligibility and approval. The benefits of these products allow business owners who either can’t or won’t provide certain documentation the ability to still get approved for funding for the business.
Unfortunately, for those businesses that don’t invoice your customers on a regular basis, then this product is not for you, and you will need to look at other options.
Pros
- Reduced to No documentation provided for decision
- Speed-Processing times on Reduced-Doc fundings are usually 1 day
- When you are turndown for financial statements. Reduced-Doc business loans offer a solution.
Cons
- Rates can be higher than traditional financing options.
- Fees may cost more than traditional loans
- Terms may be shorter in duration
- May not offer some flexibility traditional options do
- Loan Amounts may be limited
Frequently Asked Questions
What are the Benefits of Reduced Doc Business Loans?
When you are turned down because of documentation, Reduced-Doc business loans may be an alternative source to use to avoid funding declines. The speed in which to obtain funding for your company can be the same day with Reduced-Doc business loans. So, when you need the money in an emergency, it might be the best choice.
Are Reduced Doc Business Loans difficult to obtain?
Reduced-Doc loans are less difficult than traditional routes to be approved for. There are still minimum requirements for No-Doc loans, and they look closely at the personal scores of the owner. Another thing to keep in mind, No-Doc loans may have less favorable rates, costs, and terms than that of traditional financing options.
How to Get a Business Loan Without Using Personal Credit?
Yes, you can obtain funding with a No-Doc loan if you have a low score. Keep in mind the rates, costs, and terms may be effective by your score. Invoice financing does not look at the business score at all, so that may be an attractive option if you are that type of company that invoices customers on a regular basis.
Can I Obtain a long-term loan with Reduced-Doc Loan?
The short answer is no; you cannot acquire long-term business financing without providing financial documentation. However, if you consider some options with revolving lines of credit long-term, then perhaps.
Can I Acquire a Reduced-Doc Loan if I am a start-up business?
The short answer is no; you cannot receive a start-up loan without providing documentation. Start-up financing requires a lot of paperwork related to a business plan that includes financial projections that need to be detailed, including balance sheet, profit & loss, and many projections.
What banks offer Reduced-doc business loans?
Banks do not offer reduced-doc business loans. The only type of business financing that does not typically require documentation is credit cards and not business loans.
What are the requirements for reduced-doc business loans?
Reduced doc business loans typically have relaxed documentation requirements. While specific requirements can vary between lenders, common criteria include a minimum credit score of 650-680, a consistent revenue stream, and a track record of profitability. Collateral or a personal guarantee may also be required. These loans are ideal for self-employed individuals or small businesses with limited documentation or complex financial structures. It's important to note that no-doc loans often come with higher interest rates and stricter repayment terms due to the increased risk for lenders.
Are bank statements proof of income?
Bank statements are considered proof of revenue and not income which would be profit & loss statements and tax returns. Bank statements show the lender the business's cash flow with debits, credits, and daily balances. Lenders use bank statements to determine how a business manages cash flow by looking at revenue and spending. Some business funding products use bank statements alone to determine eligibility and repayment ability.
Can I use my ein to get a loan?
Business lenders review a business FEIN number (Federal Employment Identification Number) assigned to the business for identification purposes and credit history as one of many factors to determine eligibility to get a no-doc business loan.
Why do lenders need bank statements?
Lenders need bank statements to evaluate the business's cash flow and ability to repay. Underwriters look at bank statements for monthly revenue consistency, average daily balance (cash reserves), # of deposits, and the itemized credits and debts of the business activities. Many lenders verify the validity of bank statements provided by businesses using third-party verification. Lenders verify bank statements to verify the accuracy and integrity of the documents as an anti-fraud measure.
How many months of bank statements do lenders use for bank statement loans?
The number of bank statements required depends on the lender and the business funding product you are applying for. Typically, the requests for the number of bank statements to review range from 3 months up to 12 months. Lenders also require all business bank accounts during a specified period related to the business, whether operating accounts, payroll accounts or any other business accounts.
What banks offer reduced-doc business loans?
Banks do not offer no-doc business loans. The only type of business financing that does not typically require documentation is credit cards and not business loans.
Advice, Tips, Warning’s about Reduced-Doc Loans
In recommending a Reduced-Doc loan, it starts with asking the question, why? Traditional loans offer better terms and product options than Reduced-Doc business loans. So, are you looking at loans without documents because you were declined based on the documentation? Are you choosing a Reduced-Doc business loan for llc or startup because you cannot produce the bank statements and documentation? Are you experiencing an emergency with your company and don’t have time to produce documentation?
If the answer is YES to any of the three main questions or situations, then we would recommend Reduced-Document loans. If the answer is NO, take the time to look at better finance opportunities that offer better rates, costs, and terms.
Apply for Reduced-Doc Business Loans Today!
AdvancePoint Capital offers an easy small business no doc loan experience. Our customers love the fast, streamlined process and high approval rates that come from working with us. Reduced documentation. All scores are considered.
Applying for a loan with AdvancePoint Capital is as simple as a 1, 2, 3, 4 process. Start with this online form, then fill out the short application page, wait a few hours for your approval, and then get your money!
