A no-paperwork business loan doesn’t mean you won’t fill out any forms. It simply means you won’t be required to complete paper forms or fax documents to your lender.
No-paperwork lenders typically require you to submit an online application and possibly scan a few key documents. You might also need to give them access to certain business accounts for verification.
Why are online lenders less likely to require paperwork?
Online no-paperwork lenders don’t require paper forms because their processes usually involve you completing your information through an online application. They also employ shortcuts to analyzing and verifying your business information. In other words, they’re willing to dig into your financial records themselves.
One way they might do this is by connecting to your company’s bookkeeping software or taking advantage of temporary read-only access to your business accounts. They can also run a hard check on your personal credit score online.
Online business lenders that don’t require physical paperwork
Are online business loans actually faster?
Yes. Whereas bank applications can take weeks or months, no-paperwork loans may deliver your money in days. With online applications, your lender can process information quickly and with a smaller underwriting staff.
No paperwork business loans are also faster because lenders typically ask for access to your accounting software and bank accounts online. It cuts down on the time it takes to provide documentation and speeds up the underwriting process by giving your lender raw data — rather than answers that need to be verified.
Is it safe to give a lender access to a bank account or accounting software?
It’s generally safe. Many lenders don’t store login credentials in a database and they’re usually not accessible to more employees than absolutely necessary — if at all.
Sharing this kind of sensitive information with any third party does come with risk, however. This is for the simple reason that it gives hackers one potential point of access to your accounts or software. Remember, even the most secure encryption is not impenetrable. It’s advised to change your financial account passwords every 3 months to keep your information safe.
How to find the best no-paperwork lender
When comparing no-paperwork lenders to find the best one for your business needs, ask these 5 important questions:
Is this the right loan for what I’m trying to accomplish? Find the right loan type for your needs. Need new equipment? Look at equipment financing. Need funds to cover a one-time expense? Look into a fixed-term loan.
Can this lender give me all the funding I need? Look for a provider that offers the amount you’re looking for. Taking out too much or too little can put you in a worse financial position.
Are the rates and fees competitive? You can often save more with a lender offering a low APR — a rate that combines interest and fees.
How long will it take to get my money? Applying with a lender that offers quick turnaround times is especially important if you’re trying to cover an urgent expense.
Do I meet the eligibility requirements? You probably don’t want to waste your time apply with lenders you don’t qualify for.
No-paperwork loans are a good option for businesses that need money fast to cover emergency expenses. They’re also a convenient way to avoid waiting around for a bank loan to go through.
Make sure to read the fine print — some online lenders can hide fees and repayment conditions that could wind your business up in even more debt.
You could, although your options may be limited. Make sure your personal finances are in top shape to get the best deal. Or consider a personal loan for business use while you’re self-employed. Note that lenders may require extra documentation to verify your income, such as your tax Notices of Assessment for the past 2-3 years or bank statements from the past 3-6 months.
Not always. Only some lenders and loan types require collateral. Alternatively, you may be able to get a business loan that does not require any collateral – learn more here.
Anna Serio is a staff writer untangling everything you need to know about personal loans, including student, car and business loans. She spent five years living in Beirut, where she was a news editor for The Daily Star and hung out with a lot of cats. She loves to eat, travel and save money.
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