Advantages of Low Doc Loans for Businesses

In today’s market, there are many advantages of low doc loans for businesses or for the self-employed borrower. Low doc loans offer no income documentation requirements.

Eligible Businesses

Many types of businesses can take advantage of these types of loans. Individuals, Corporations, Partnerships, Trusts, Estates etc. can apply. Low doc loans are especially beneficial to borrowers who may not have tax returns or financial statements readily available. These types of loans are also a flexible solution for many start-up businesses and businesses seeking capital to expand. Business owners and self-employed individuals have turned to this type of loan as a quick loan solution. Many have been turned down by local banks, have no prior business credit or deemed a credit risk.

Uses of Low Doc Loans

Low doc loans for used business or commercial purposes, as well as residential purposes. Commercial low doc loans are available for the purchase or refinance of properties. Some eligible properties include:

  • Condos and multi-family dwellings
  • Apartments and mixed-use buildings
  • bed and breakfasts
  • mobile home parks
  • hotels/motels
  • resorts
  • commercial buildings/office buildings
  • retail units and restaurants
  • churches
  • golf courses
  • warehouses and industrial buildings
  • gas stations and auto repair shops
  • marinas
  • strip malls and shopping centers
  • self-storage properties

Additionally, with many low doc loans programs you may use the funds for business expansion, equipment purchases, operating capital and many construction or rehab projects. Some lenders will allow you to cross-collateralize in addition to offering quick closings.

Advantages

One major advantage of a low doc loan is that you can avoid the extensive documentation that traditional banks require. Other advantages include low down payment options, loans available for borrowers who have experienced bankruptcy or foreclosure, and unlimited cash out options, if you are refinancing.  Like traditional full documentation loans, fixed or variable rates are still available, as well as interest only loan programs.

Applying for a Low Doc Loan

When applying for a low doc loan, the standard loan application would still need to be completed. Many business or commercial lenders use the 1003 loan application form, this is the standard form used for residential loans as well. Additionally, the borrower would complete a self-certification income declaration form stating their income. The extensive documentation from a traditional lender or bank is not necessary.