At times, self employed professionals and small business owners can face some difficulty in producing financial statements and past income tax returns to avail loans. In this regard, if they want to expand their business, they may be unable able to receive proper financial assistance from banks. If that’s the case with you, then low doc business finance can come as a boon to you. With such kind of finance option, you may avail loans without providing so many documents. As compared to traditional loans, lenders may charge you additional interest rate on such low doc loans. However, if you easily repay them, you may redraw more amounts later at less interest rate from the same lender. Let’s know more about such kind of loans.
Applying for low doc business finance
There are different types of platforms from where you can apply for low doc business loans. You may either visit a lender’s office to ask about the option, or you may visit their official website and fulfill all formalities. You may also call their customer care department and talk about the procedure to avail low doc business loans.
Here are a few things that you need to keep in mind while applying for such a loan:
Before applying for such a loan, don’t forget to check their rate of interest along with other hidden charges, fees and penalties. You can search such low loc business loans online and compare their rates accordingly. Some lenders can charge you less interest rate, but they may have hefty late fines, pre-payment charges, foreclosing charges and processing fees. So you need to check these fees and compare their charges to choose a feasible option.
Some lenders may ask you to submit your income statement along with a few other documents, such as your residential proof, business proof and bank account statements. This is the most convenient process and you will get the approval within two to three days. The lender will automatically transfer the loan amount in your bank account after both the parties sign the loan agreement.
Self employed people who don’t have a fixed monthly income, and new businesses that does not have past income tax returns, can apply for low doc business loans. Individuals or entrepreneurs with bad credit score may also apply for low doc business finance, provided that they have steady business growth and potential business plan.
If you have just started your business, then you cannot avail any unsecured loans from banks. This is because all banks and financial institutions need to check your past financial records and business stability. So in this case, you can apply for low doc business finance to expand your new business. Once you start receiving constant cash flow, you can convert your low doc loan into a traditional business loan.
Banks and other traditional lenders take so much time to process a loan. After all, they need to check your documents, property and living assets before disbursing the loan. You need to wait for a long time, and you have to go through a lengthy documentation process as well. Even they do not provide you any assurance about your loan approval. After waiting for so long, they may finally decide to reject your loan application. So it is better to go to a private lender who provides easy loan application facility for low doc business finance, and sometimes assured loan approval too.
A “full doc” loan requires so many documents such as tax returns, financial statements, inventory records, residential proof, income certificate, credit history and lots more. But for low doc business finance, you do not need to submit your financial statements and tax returns. Lenders usually approve low doc loans much quickly and easily than traditional loans.
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