A Guide to No-Doc Business Loans and Low-Doc Business Loans

Financials not yet done?  

Maybe you’re a startup business and don’t have 2 years of financials.

Perhaps through some exceptional circumstances (COVID lockdowns, anyone???) your credit rating isn’t what it would normally be.

Business owners in Australia face a number of challenges when it comes to securing funding, particularly if they lack the required documentation a full-doc loan application requires.

In the Reserve Bank of Australia’s paper Access to Small Business Finance, the RBA described how traditional lending options can often be restrictive and time-consuming for small business owners.  Limited access to credit makes it difficult for small business owners to access the funds they need and stifles business. However, there are alternative options available, such as no-doc business loans and low-doc business loans, which are designed specifically to help business owners overcome these challenges.

Get a quote for a no-doc or low-doc loan for your business today

What are No-Doc Business Loans and Low-Doc Business Loans? 

No doc business loans and low doc business loans are alternative financing options that offer more flexible financing lending criteria than traditional lending options. The terms no-doc business loans and low-doc business loans are sometimes used interchangeably but as a general guide, they are business loans requiring minimal documentation, making it easier for business owners to secure funding.

Why Use No-Doc Business Loans and Low-Doc Business Loans? 

These loans are designed to help business owners who may not meet the criteria for traditional lending, such as those who have poor credit or limited documentation. They provide quick access to funding and offer a more streamlined application process, helping to save time and make the process less cumbersome for business owners.

Different Types of No-Doc and Low-Doc Business Loans

Unsecured Overdrafts

Unsecured Overdrafts are a type of no-doc or low-doc business loan that allows business owners to access funds as needed without having to secure the line of credit with collateral. This type of loan provides a flexible financing line of credit, allowing business owners to draw on funds as needed to cover expenses.  The assessment process for a limit of up to $500,000 is carried out by analysing bank data.

Benefits:

• No collateral required
• Easy access to funds as needed
• Flexible repayment terms
• Can help manage cash flow

Unsecured Term Loans 

Unsecured term loans are a type of no-doc or low-doc business loan that provides a lump sum of funds for a specified term. This type of business loan is ideal for business owners who need to make a larger purchase or invest in their business.  Unsecured term loans are available in varying term lengths up to 5 years.

Benefits:

• No collateral required
• Access to a lump sum of funds
• Fixed repayments over a specified term
• Can help with long-term planning and budgeting

Equipment Finance

Equipment Finance is a type of no-doc or low-doc business loan that allows business owners to finance the purchase of equipment, such as machinery or vehicles. The equipment itself is used as collateral for the loan.  Low or no doc equipment finance up to $500,000 is available.

Benefits:

• Access to funds for purchasing equipment
• Equipment used as collateral
• Fixed repayments over a specified term
• Can help improve business operations and increase productivity

Property Loans

Property loans are a type of no-doc or low-doc business loan that allows business owners to finance the purchase or refinance of property, such as a commercial building or investment property. The property itself is used as collateral for the loan.  More traditional lenders will still require some financial documentation whereas many private lenders will rely on a valuation of the property and a legitimate exit strategy as the main components of their application process.

Benefits:

• Access to funds for purchasing property
• Property used as collateral
• Fixed repayments over a specified term
• Can help increase assets and improve business operations
• Can be much faster than traditional property loans

Each of these no-doc and low-doc business loan options offers unique benefits and can be tailored to meet the specific needs of a business. It’s important to consider the features and benefits of each option to determine which type of loan is best for your business.

Benefits of No-Doc Business Loans and Low-Doc Business Loans:

1. Faster Approvals: No-doc business loans and low-doc business loans often have a quicker approval process than traditional lending options, which can be particularly useful for business owners who need funds quickly.  Some unsecured business loans can be applied for and funded on the same day.

2. Flexible Repayment Terms: Many of these loans offer more flexible financing repayment terms, with some private lenders allowing interest to be capitalised for a year.  

3. Access to Funds Without Collateral: No doc business loans and low doc business loans can be unsecured business loans, meaning that they do not require collateral, which can be beneficial for business owners who don’t wish to use property security.

 

No-doc business loans and low-doc business loans are valuable alternatives for business owners in Australia who are looking for funding but may not meet the criteria for traditional lending. 

These loans often offer faster, more flexible financing options that can help business owners overcome the challenges faced by traditional full-doc lending solutions. With their minimal documentation requirements, these loans are a great option for business owners who want to secure funding and improve cash flow without the hassle of a lengthy application process.

Need a no-doc business loan or low-doc business loan solution for your business?  Talk to an expert today