When you have immediate needs for your LLC business, no-doc loans offer a faster way to obtain funding than more traditional bank loans. Whether you’re looking for a business line of credit, equipment financing or a short-term loan, a number of lenders can help you meet your business goals with little to no paperwork and fast turnaround times.
Compare no- or low-doc business loans for LLCs
Check out these lenders that offer no- or low-doc business loans for LLCs, including types of loans, loan amounts and loan terms.
Lender
Types of loans
Loan amounts
Loan terms
Lendzi
LOC, MCA, Term loans, invoice factoring, equipment financing
Is my LLC classification a consideration when getting a business loan?
Business lenders consider a number of factors before granting loan approval, possibly including the structure of your business. However, operating as an LLC shouldn’t hinder your chance of getting a no-doc business loan as long as you meet other requirements.
“Obtaining no-doc or low-doc loans for Limited Liability Companies (LLCs) can indeed be a challenging process,” says Jon Morgan, CEO and editor-in-chief of Venture Smarter, a business consulting firm that specializes in helping startups and small businesses scale and grow.
“The primary reason for this is the nature of these loans,” Morgan continues. “They are designed to require less documentation than traditional loans, which can be particularly beneficial for businesses that have complex income structures or those that value privacy.”
“However, this lack of documentation can make it difficult for lenders to assess the risk associated with the loan. As a result, lenders often perceive these loans as higher risk. Despite these challenges, it’s not impossible for an LLC to secure a no-doc or low-doc loan. It just requires a strong business credit history and a solid relationship with the lender.”
What is a no-doc business loan?
Most traditional business loans require extensive documentation during the underwriting process. This documentation may include bank and financial statements, tax returns, business proposals and more. A no-doc business loan, on the other hand, requires almost no paperwork. No-doc lending refers more to specific types of business loans.
“Merchant cash advances (MCAs), lines of credit (LOCs) and some short-term business loans are more likely to be no- or low-doc,” explains Michael Baynes, co-founder and CEO of Clarify Capital. “These types of loans often focus more on recent business performance and cash flow rather than historical financial health. Long-term loans, most real estate loans and SBA loans generally will not be no-doc or low-doc due to their stringent risk assessments and requirements for detailed financial documentation.”
The online loan application process allows some lenders to connect directly to your business bank accounts, which can eliminate the need for piles of paperwork. In turn, this cuts down on the approval process timeline, making funding much quicker than with traditional business loans. However, this convenience usually means higher interest rates and fees due to the increased risk to lenders.
Pros and cons of no-doc loans for LLCs
Consider the risks along with the rewards before jumping in:
Easy application. Most no-doc lenders use online applications and bank account connections that speed up the application process for LLC borrowers.
Variety of loan types. Many types of no-doc business financing options are available, allowing borrowers to choose one that best fits their immediate needs.
Credit scores are not as heavily weighted. Some no-doc lenders may require good credit scores of 670 or higher, but others are willing to work with businesses with lower scores.
Cons
Higher interest rates. Fast funding and a bigger risk for lenders typically translate to higher rates for LLCs looking for no-doc business loans.
More fees. The speed and convenience of no-doc loans for LLCs sometimes mean higher fees for borrowers.
Rigorous repayment schedules. Some loan types that fall into the no- or low-doc category — such as invoice financing and merchant cash advances — may require daily or weekly repayments.
Shorter loan terms. Many no-doc business loans have shorter loan terms than traditional business bank loans, which typically allow more time to repay the loan.
Define your objective. Clearly define your loan needs before you start looking at LLC business lenders.
Compare lenders. With your loan purpose in mind, compare lenders that offer the loan type you’re looking for. Be sure to look at interest rates, loan terms and added fees.
Get prequalified. If possible, get prequalified from a few lenders to get a better idea of the rates and terms you may qualify for. Keep in mind that prequalifying isn’t a guarantee of loan approval, and your actual rates may differ after you’re approved.
Apply for the loan. Fill out the loan application, which typically includes giving the lender read-only access to your bank account, submitting bank statements or providing other minimal paperwork.
Sign the contract. If approved, carefully review the contract for exact loan terms and fees associated with the loan before you sign.
How to qualify
The exact requirements to qualify for a no-doc loan for your LLC may vary based on lender and loan purpose, but here are basic criteria you’ll likely need to meet.
Proof of revenue. No-doc loans require very little paperwork, but lenders want to ensure you bring in enough revenue to repay the loan. Lenders typically have minimum revenue requirements.
Credit check. Virtually all no-doc lenders check your personal and business credit scores, but some lenders may be more lenient with minimum credit score requirements.
Age of business. Many business lenders require a business to be at least two years old to qualify for loan approval, but some lenders consider firms with only six months in business.
Collateral or down payments. Down payments or collateral are generally less common with no-doc loans than for more traditional business financing. But, depending on your financial situation or loan type, you may need to put some money down or provide collateral to qualify.
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What is your primary need for a business loan?
Alternatives to no-doc loans for LLCs
It’s always a smart move to explore all your options when searching for the best business loan for your needs. Particularly for newer businesses, you may need to consider these alternatives to no-doc loans.
Business credit cards. Qualifying for a business credit card can be easier than getting a loan, and they come with added perks like travel rewards and low introductory rates.
SBA loans. While SBA loans are about as far as you can get from no-doc loans, they typically have competitive rates and are a solid option to consider if you have decent credit and can’t qualify for a loan elsewhere.
Microloans. Microloans are usually small, short-term loans offered by community lenders or nonprofits. If your business is in an underserved area or you’re a woman or minority business owner, this might be a viable option.
Peer-to-peer (P2P) funding. Rates can be higher for loans from P2P lending platforms, but your chances of loan approval may be higher as well — just watch out for fees on top of interest so you’re aware of the loan’s total cost.
Crowdfunding. Crowdfunding is another option similar to P2P lending, except your loan is funded by a large pool of people or investors. Depending on the platform, you may not need to repay the funds.
Personal loans. Many business owners turn to personal loans to fund their companies. They’re typically easier to get than business loans, and some lenders offer loan amounts up to $100,000.
Home equity financing. Business owners with equity in their homes could consider a home equity loan or home equity line of credit (HELOC). Rates are typically low because your house secures the loan, but the loan process can be slow.
Bottom line
For LLCs looking for faster funding options, no-doc business loans can be an efficient way to achieve that goal. Some common no- or low-doc loan types include business lines of credit, MCAs, invoice financing or factoring, equipment financing and short-term business loans.
No-doc loans are usually more expensive than traditional business loans, including higher interest rates and fees. However, the streamlined application process and fast funding can help LLCs meet immediate financial needs and jump on new business opportunities with minimum fuss.
Frequently asked questions
What is the minimum credit score for a no-doc loan?
Minimum credit score requirements can vary significantly by lender, with 670 or above giving you the best chance for loan approval. However, some no-doc lenders accept lower scores, and loan types such as invoice factoring or MCAs may not consider your credit score at all.
Can you get a no-doc business loan with bad credit?
As long as you meet other requirements to qualify — such as time in business and revenue requirements — you can probably still get a no-doc loan with bad credit. But, you may pay higher rates and fees due to the added risk for the lender.
Do all banks have no-doc loans?
Most banks that offer traditional business loans don’t offer no-doc loans. For the most part, you’ll have to look to alternative lenders and loan types to find no-doc business loans.
Are business lines of credit secured or unsecured?
Lines of credit can be either secured or unsecured, depending on the lender and the financial circumstances of your business. Secured LOCs usually use business assets — such as equipment or real estate — as collateral for the loan. If you can’t repay it, the lender can seize your assets to offset the loss.
Unsecured credit lines are not backed by an asset, so they are riskier for the lender. If you default on your payments, there’s no asset for the lender to fall back on. Because of the added risk for lenders, unsecured LOCs can be more difficult to qualify for and typically have higher rates and fees.
Lacey Stark is a freelance personal finance writer for Finder, specializing
in banking, loans, investing, estate planning, and more. She has 20
years of experience writing and editing for magazines, newspapers, and
online publications. A word nerd from childhood, Lacey officially got her
start reporting on live sporting events and moved on to cover topics
such as construction, technology, and travel before finding her niche in
personal finance. Originally from New England, she received her
bachelor’s degree from the University of Denver and completed a
postgraduate journalism program at Metropolitan State University also
in Denver. She currently lives in Chicagoland with her dog Chunk and
likes to read and play golf.
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