Can You Get a Business Loan Without All the Paperwork?
The short answer is YES. There are No Doc business loans available in the finance marketplace. Usually, a small business owner who is looking for No Doc business loans falls into three different categories:
• You were declined based on the documentation
• You cannot produce the documentation due to accounting delays or technical issues
• You don’t have time to produce documentation
If you don’t fit into one of those three categories, then you should seriously consider the other funding products that exist in the finance marketplace. No-Doc loan options present a greater risk to lenders than traditional loan options because they have to make decisions with less paperwork to determine risk.
If you do fit into one of the three above categories, it’s important to know the differences in terminology and set proper expectations for documentation for the No-Doc business loans that are available.
What Type of No-Doc Business Loans Are There?
True No Documentation Business Loans-True no documentation is just that, no documentation other than filling out an online application to be able to determine credit eligibility. That means no business bank statements, no tax returns, and no other financial statements at all for that matter.
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 Advance, Merchant Cash Advance. Invoice financing doesn’t even ask you to state your income as a small business owner. Sometimes business cards, in rare circumstances, 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 refer 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.
No-Doc Loan Uses include, but not limited to;
- Cash Flow
- Inventory or supplies
- Hire new employees
- Emergency Cash infusions such as Emergency relief for accounts receivable issues
5 Best No-Doc Business Loans
1. Business Credit Cards
Business credit cards function like personal ones. It has revolving lines of credit in which a card is issued that can be used for both purchases and payments. Most business owners use these cards in conjunction with other products. Only a one-page application usually conducted online or by phone is required. There are cases for lines of credit amounts where more documentation will be requested.
Rates: Interest rates start at 0% up to 28.99%
Terms: No term limits, Revolving Lines of Credit
Fees: No Origination Fees
Payments: Low flexible monthly payments
Credit Score Standards: Must have good to excellent score and deep history
Documentation: True No Doc. One Page Application (larger amount requests may require more documentation)
Benefits and Best Uses of Business Credit Card for Working Capital
This funding option offers flexibility and access to lines of credit that are second to none. The ability to both purchase items and use it to pay for bills or invoices can also free up short term cash problems and is very convenient. There are no restrictions on the use of money with this small business loan product.
2. Short Term Business Loans
Short term loans come with a fixed amount “lump sum” provided upfront, with a fixed payback amount over a fixed term of time typically 6 to 18 months. Short term business loans, unlike traditional financing, don’t typically require tax returns or other financial statements, just bank statements and a one-page application. Rates are based on factor costs and not principal & interest and cost more than traditional lending products. The good news is these products require very little paperwork and requirements are much more forgiving than traditional funding.
Rates: Factor Rates starting at 1.10 up to 1.45
Terms: Typically 6 to 18 months
Fees: 1% to 5% Origination Fees
Payments: Weekly, Bi-Weekly, Monthly, and in some cases daily Monday-Friday
Credit Score Standards: All accepted from Poor to Excellent
Special Features: Fast Process. Approval to funding can be same day to 24 hours
Documentation: Reduced or low Doc.1 page application and 3 months bank statements
Benefits and Best Uses of Short Term Loans
Short term financing has higher rates, shorter terms, and fees but can come to rescue the small business that is in need of the money now and can’t get approved for more traditional loan products does to financial statements documentation. There are no restrictions for the use of money with most short term options.
3. Merchant Cash Advance
Merchant Cash Advances, also known as a Purchase of Future Sales Agreements, advance a “lump sum” of money up front to a small business owner with a discounted purchase price (also known as specified amount) to payback. The advance is repaid by taking a fixed percentage of future credit card sales batches until the payback amount is paid back in full, there is no term limit with advances as the fixed back percentage never changes. The time frame to pay back depends on the volumes of future card sales.
It’s estimated that Merchant Cash Advances are set up with expectations of being repaid in 6 to 18 months, but again it may be longer or shorter depending on future card sales. The only documentation required for funding is a one-page application, three months bank statements, and three months of merchant processing statements. No other financial statements required.
Rates: Factor Rates between 1.15% up to 1.45%
Terms: No term limits estimated payback periods are 6 to 18 months
Fees: Typically 1% to 3% Origination Fees
Payments: Fixed percentage splits from future card batches
Credit Score Standards: All types considered from Poor to Excellent
Documentation: Reduced, low Doc. 1-page application, 3 months bank statements, and 3 months of merchant processing statements.
Benefits and Best Uses of Merchant Cash Advance (MCAs)
Merchant cash advances do cost more than traditional bank financing with higher rates and fees, but the flexibility of repayment, which is attached to the fixed percentage of future sales, really helps businesses that fluctuate in sales or are a seasonal company. You couple that with the limited documentation you provide, MCA’s really helps businesses that fluctuate in sales or are seasonal. Not all businesses are equal, and sometimes traditional financing products are not an option for some. There are no limitations for the use of money and can be used for a variety of different purposes, but a majority of money is cash flow needs.
4. Business Cash Advance
Business Cash Advances, also known as a Purchase of Future Sales Agreements, advance a fixed “lump sum” of money with a discounted purchase price, also known as a specified amount, to payback. The advance is repaid by taking a fixed percentage of future overall sales, which are different than a merchant cash advances, which take a percentage of future card sales.
Payments are collected by a fixed daily or weekly payment deducted from a company’s bank account, which is based on the fixed percentage of future sales. After every month, if the fixed payments taken are more than the set future percentage of sales, than a refund back to the merchant can occur. This repayment continues until the payback amount is paid back in full. Therefore, there is no term limit with advances as the fixed payback percentage ever changes. The time frame to pay back depends on the volumes of future overall sales. It’s estimated that Business Cash Advances are set up with expectations of being repaid in 6 to 18 months, but again, it may be longer or shorter depending on future card sales. Documentation is limited to 1-page application and three months bank statements. No tax return is required.
Rates: Factor Rates between 1.10% up to 1.45%
Terms: No term limits estimated payback periods are 6 to 18 months
Fees: Typically 1% to 3% Origination Fees
Payments: Fixed ACH payments are weekly or daily Monday-Friday
Credit Score Standards: All types from Poor to Excellent is considered
Documentation: Reduced or Low Documentation. 1-page Application, 3 months bank statements
Benefits and Best Uses of Business Cash Advances
Business Cash Advances costs are higher than those of traditional financing, but when documentation is an issue — this option can be a real lifesaver. There are no limitations for the use of money and can be used for a variety of different purposes, but a majority of the reasons are a cash influx to help the company.
5. Invoice Financing
Invoice financing, also known as “Invoice Factoring” or “Accounts Receivable Financing,” is a type of financing that allows business owners to acquire cash quickly from invoices that they would otherwise be waiting up to 90 days or more, depending on invoice terms, to receive payment from the customer.
This type of financing allows you to obtain an advance of up to 95% percent of purchase orders or outstanding invoices from your customers. A finance company will advance a set amount of the unpaid invoice to the business owner and then collect directly from the client or customer for the unpaid portion. The approval process is directed to the customer/client and not the business owner, so there is little documentation required other than an application, Accounts receivable report, and contact information of the companies you invoice on a regular basis.
Rates: Factor Rates 1.50% to 2.75% of invoice amount advanced
Fees: Typically a monthly service fees of based on the amount of invoices
Score Standards: Personal credit of the business owner not needed. Companies that are invoiced will be vetted.
Documentation: Reduced or Low Doc. 1-page application, accounts receivable aging report, and clients contact information
Benefits and best uses of Invoice Financing
When traditional financing is not an option for a business, invoice factoring can provide money in a pinch and allow a company to continue to operate smoothly. The costs are low and require no personal credit check of the business owner and limited documentation. Invoice factoring is a cash flow lifesaver. There are no limitations as to the use of, but a majority of the reasons are cash flow to help the business.
The fast, convenient and straightforward way to get the money you need for your business – now! Get Your Quote Today by filling out our simple form.
What are the Pros and Cons of a No-Doc Business Loan?
All of the products mentioned provide funding to businesses with some type of reduced documentation. 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.
- Reduced to No documentation provided for decision
- Speed-Processing times on No-Doc fundings are usually 1 day
- When you are turndown for financial statements. No-Doc loans offer a solution.
- Rates may be higher than that of traditional financing
- 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 No Doc Business Loans?
When you are turned down because of documentation, No-Doc 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 No-Doc loans. So, when you need the money in an emergency, it might be the best choice.
Are No Doc Business Loans difficult to obtain?
No-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 No-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 No-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.
Advice, Tips, Warning’s about No -Doc Loans
In recommending a No-Doc loan, it starts with asking the question, why? Traditional loans offer better terms and product options than No-Doc business loans. So, are you looking at No-Doc loans because you were declined based on the documentation? Are you choosing a No-Doc business loan because you cannot produce the 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 No-Doc loans. If the answer is NO, take the time to look at better finance opportunities that offer better rates, costs, and terms.
How to Apply for No-Doc Business Loans?
AdvancePoint Capital offers an easy business loan experience. Our customers love the fast, streamlined process and high approval rates that come from working with us. 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!
The fast, convenient, and straightforward way to get the money you need for your business – now!
Get your Quote Today by filling out our simple form.