Applying for almost any business loan requires at least some paperwork. While true no-documentation business loans don't really exist, there are some options that require far less documentation than traditional small business loans.
What is a no-document business loan?
A no-documentation business loan is a business loan that requires minimal documentation, such as a business bank statement, to apply. Business loans that require minimal documentation tend to have higher interest rates and shorter repayment terms than bank or his SBA loans. However, for borrowers who cannot qualify for traditional financing options or who need funds quickly, no-document business loans can offer flexible eligibility requirements and fast funding times.
We start with a quick survey to better understand your business's unique needs.
Once we have found your personalized match, our team will be happy to discuss the further process.
How do no-document business loans work?
The documentation required by traditional lenders typically helps them understand a company's ability to repay a loan. This ability to repay typically comes from monthly cash flow and profits. Lenders who require less documentation are usually able to do so because they base their lending decisions on other factors, such as the amount of collateral they can pledge and the invoices they receive. They may also rely on other risk mitigation measures, such as higher interest rates or weekly payments. These methods help give lenders more peace of mind that they will be repaid and eliminate the need to look as deeply into a company's financials.
Virtually document-free business loan options
Here are some types of loans that require minimal paperwork, as well as some of the pros and cons of choosing a no-documents business loan.
unsecured short term business loan
Unsecured short-term business loans do not require physical collateral such as equipment or real estate. Compared to secured long-term loans, these products require less documentation and tend to be funded quickly.
Many money lenders only require minimal documentation, and some even connect financial data to their systems so business information can be evaluated more quickly, without requiring you to upload various documents. There is also.
For example, to apply for a short-term loan from OnDeck, all you need to do is provide basic information about yourself and your business, as well as three months' worth of bank statements. Lenders say the application process takes just a few minutes and funds can be available as soon as the same day.
Therefore, if you need a business loan right away, an unsecured loan may make sense. However, you need to be careful and have confidence in your ability to repay. Short-term loans tend to have higher interest rates and shorter repayment terms.
OnDeck's maximum duration is
twenty four
For example, from month to month, interest rates vary within a maximum range.
99.9
% (based on loans originated in the half year ending 31 March 2023). Unsecured business loans may also require you to provide a personal guarantee, creating additional personal liability.
business credit line
Like unsecured short-term loans, many online business lines of credit have minimal documentation requirements. These lines of credit provide flexible funding that can be used for working capital and general business expenses.
For example, Fundbox offers business lines of credit up to $150,000 with 12- or 24-week repayment terms.
To apply, sign up for a Fundbox account, enter basic information about yourself and your business, and connect your accounting software, business checking account, or other source to provide your financial data. The entire process takes just a few minutes, and if approved, you can receive your funds as early as the next business day.
In many ways, a business line of credit is similar to a business credit card and can also be used as a financing option with minimal paperwork. Business credit cards can be a good option for everyday purchases, especially for new companies just starting out.
However, it's important to note that getting a business credit card typically requires good personal credit, and the annual percentage rate (APR) can be high if you don't pay off your balance every month.
invoice factoring
Although invoice factoring is not technically a loan, it provides funds to your business quickly with minimal paperwork. Invoice factoring (also known as accounts receivable factoring) allows you to secure cash by selling unpaid customer invoices at a discount to a third-party company. Typically, you pay about 85% to 90% of the amount upfront, and the rest, excluding fees, is paid after the invoice is paid.
When you apply for invoice factoring, many factoring companies offer the ability to create an account and connect your accounting or invoicing software to their online platform.
For example, a company called FundThrough lets you provide basic information about your business and connect your QuickBooks account to the FundThrough platform. You can then pull your invoices from QuickBooks into FundThrough and select which invoices to send for funding. Once approved, funds will be in your bank account as early as the next business day.
With this streamlined and simple process, invoice factoring helps business-to-business businesses access capital quickly and often without the same requirements as other types of small business financing.
invoice finance
Similar to invoice factoring, invoice financing, or accounts receivable financing, you can also use unpaid customer invoices to finance your business. Instead of selling your invoices to a third-party company, use them as collateral for a business loan.
Applying for invoice financing is just as easy as factoring, and even faster. Application requirements vary by financial institution, but typically include access to bank information, articles of incorporation, and invoices.
Seller cash advance
Merchant cash advances (MCAs) provide up-front funding from a portion of your credit or debit card sales, plus fees. These advances require minimal paperwork, and you may only need a few months of business credit card statements to qualify.
However, it's important to note that MCAs are one of the most expensive types of business loans and require frequent (sometimes daily) payments.
APRs for merchant cash advances can reach triple digits, and these products can create a cycle of debt that's difficult to break quickly. If possible, we recommend that you consider all other options before resorting to an MCA.
Advantages and disadvantages of no-document business loans
Strong Points
Cons
A simple application. Compared to more traditional types of financing, you don't have to spend as much time gathering and preparing documents to apply for a no-documents business loan. Applying for these products online is quick and easy, and the process often takes only a few minutes.
Interest rates will rise. With a no-documentation business loan, you don't provide as much documentation, so the lender won't have as much confidence in your ability to repay the debt. To reduce risk, lenders charge higher interest rates as a result.
Shorter repayment period. Document-free business loans are typically short-term, ranging from 12 weeks to 24 months. On the other hand, more traditional loan options can have repayment terms of up to 5, 10, or even 20 years.
It's easy to qualify. Like other online loan options, no-document business loans tend to have flexible eligibility requirements. Start-up businesses and borrowers with bad credit may qualify.
Debt Cycle Risk. With high interest rates, short periods, and frequent payments, undocumented business loans can quickly become a problem, especially if your business is already struggling with cash flow. If you are unable to keep up with your payments, you may take out another loan or refinance your existing loan to pay it off, which can create a cycle of debt that is difficult to break.
How to get a business loan without documents
When you start your search, you should consider how much money you need and why you need it. You should also consider the terms of your business, such as your personal credit score, annual revenue, and business hours to understand where you stand compared to different financial institutions.
When researching and comparing no-documents business lenders, you should evaluate the following factors to find the right option for you.
Types of loans available.
Interest level.
Fee.
Repayment terms.
application process.
Speed of financing.
customer support.
Lender's Reputation.
Once you find a lender, you can submit your loan application and receive approval within a few business days.
find the right business loan
The best business loans are generally those with the lowest interest rates and the most ideal terms. However, other factors, such as time to funding and business qualifications, will help determine which option you choose. NerdWallet encourages you to compare small business loans to find the best fit for your business.
FAQ
not much. While there is no true no-documentation business loan, there are options that require minimal documentation to obtain funding.
No-documentation business loans typically exist for businesses that don't qualify for traditional forms of financing, so they're very easy to qualify for. However, interest rates may be higher and repayment terms may be shorter.
Most banks and credit unions do not offer no-documentation business loans. Online lenders are more likely to offer loans with less paperwork.
For a no-documents business loan, you'll likely need to provide basic information about yourself, your business, and your financial situation. For example, some financial institutions may require bank statements, while others may require you to connect your financial account to an online system. Ultimately, the application details required will vary depending on the financial institution and loan type.
