Qualifying Low Doc Loans with Bad Credit

Qualifying for low doc loan business loans when you have bad credit can be a challenge. Bad credit does not always mean that you have a poor history of paying back your debts, it can sometimes refer to new a new business.

Although more difficult, it is possible for these types of businesses to get low doc loans. There might be a bit more required than a traditional low do business loan but nothing near a traditional business loan.

Low Doc Loans

A low doc loan refers to a loan that usually only requires a loan application and a declaration of income. When a company has little or no credit to work with, they are considered a higher risk than those companies with an established credit history. In many cases they will not qualify for a low doc business loan and if they do the interest rate could be increased to compensate for the risk the lender is taking in qualifying them.

Who Can Apply?

Almost any small business, individual, corporation, partnership or trust can qualify for a low doc business loan. The lender will take into account the validity of your business along with the worth. If you should default in your loan what is the collateral (your business) worth to them. You can apply in person or send in an online application. Each lender might have slightly different qualification standards and loans available for different types of businesses.

What Is Bad Credit?

The term bad credit generally refers to two different types of credit. Little or no credit is considered bad credit because the bank has nothing to fall back on when it comes to approving your loan. They do not know your history as a company and this is considered very high risk to a lender.

Another type of bad credit is truly bad credit that is based on a company’s credit history. If the company has had trouble paying bills on time or has defaulted on some items then the credit score will account for that.

By having a co signer, your individual credit history will go a long way in helping your chances of receiving a low doc loan. If your credit is questionable the lender might in fact require it. Obtaining a low doc business loan is more difficult but not impossible.