LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
No-Doc Business Loans: Do They Really Exist?
Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.
Businesses that are looking for additional financing help often find themselves encountering plenty of paperwork that they have to fill out. This can be time-consuming and frustrating. Fortunately, there are no-doc business loans available that require businesses to fill out minimal paperwork.
Can you get a business loan without all the paperwork?
Traditional banking institutions often require extensive paperwork prior to approving a business loan. This paperwork can include everything from your resume to your business’s tax returns. Banks ask for this paperwork to help assess the risks involved with extending you a loan and your creditworthiness. The amount of paperwork can be daunting. Fortunately, over the last few years, more and more alternative lenders have emerged. These lenders offer simpler application processes that cut out the excessive paperwork people normally encounter when applying for a loan.
Advantages of no-doc business loans
The obvious advantage of getting a no-doc business loan is the lower amount of paperwork involved. This helps cut down on the time that you spend during the application process and generally reduces the hassle involved. The approval process can also be very quick – as low as 24 hours. Because less paperwork is involved, the entire application process is streamlined.
Alternative lenders are not banks, which face tighter regulations that make it more difficult to extend loans. Banks draw their funds from customers who make deposits with the banks, so the government regulates how those funds can be used. Alternative lenders don’t draw on personal accounts for their funds. Instead, they have other sources of funding, such as investors, who provide the funds that borrowers are looking for.
Where to find no-doc business loans
Alternative lenders are the best option when it comes to finding small business loans that require little documentation to qualify for. These lenders still offer robust financing options, such as short-term loans, invoice financing, merchant cash advances and short-term lines of credit.
If you’re thinking about finding financing that requires little paperwork, here are a few options to consider and where to find them.
Short-term loans are offered by a variety of alternative lenders. These loans are typically for a term of between three to 12 months and may include interest rates of as low as 3.5%. These loans can be put toward the purchase of inventory, seasonal hirings, renovating locations and more. Alternative lenders offer these in loan amounts of up to $500,000.
Some lenders that offer short-term loans include:
With invoice financing, a borrower sells off its invoices to a third party at a discount. This helps a borrower get immediate money that it needs, perhaps due to a financial emergency. The buyer then collects on the invoices at the full price and profits off of the difference. Factoring lines of up to $5 million are available with interest rates of as low as 0.25% per week. Invoice financing is beneficial for smaller businesses that find it difficult to acquire a business loan. This form of financing helps increase immediate cash flow and doesn’t show up on a balance sheet as an expense.
Some lenders that offer invoice financing include:
Merchant cash advance
Another alternative to a standard loan is a merchant cash advance. This advance involves a buyer purchasing your future receivables. In exchange for the cash advance, borrowers pay back the amount they owe as a percentage of credit card purchases. Merchant cash advances are offered in amounts of up to $150,000 and borrowers are typically expected to pay back the amount within 14 months. This form of financing requires no collateral and has no set payment schedule. It’s also easier to qualify for a merchant cash advance than a traditional loan, but beware: these types of “loans” can be very expensive.
Some lenders that offer merchant cash advances include:
Short-term lines of credit
Short-term business lines of credit are similar to short-term loans and come in amounts of up to $100,000. The annual percentage rate on these credit lines can be as low as 13.99% and is determined on the lender’s assessment of your business. Payments can be made automatically every week through a deduction from your bank account, or they can be done monthly. A credit line is great for businesses that are having temporary problems with cash flow, but it can also be put toward covering a variety of expenses. Business owners can also benefit from lower interest rates if they keep the amount they borrow low.
Some lenders that offer short-term lines of credit include:
The bottom line
If you’re looking for financing that doesn’t involve a ton of paperwork to qualify for, alternative lenders provide a variety of options. Short-term loans, invoice financing, merchant cash advances and short-term lines of credit can all help finance your business operations. These are available through alternative lenders who are not bound by the same regulations that banks operate by.