Requirements for Low Doc Loans for Businesses

Obtaining a low doc loan is one of the easiest loan processes you can go through. You are not required to submit many supporting documents in order to complete the loan process. As a result, the paperwork and application runs much smoother and quicker and the loans are easier to close.

Paperwork

Most financial institutions usually require proof of income for the last 24 months. They also require a profit and loss statement along with an application. A low doc loan simply requires a stated amount of earnings. Once you give the statement on the declaration form, you are done. The amount you report is your statement and it is a legal document. You will need to make sure that what you put on that form is as true as possible because your loan could default if the income is verified to be fraudulent with the IRS.  No other proof of income will be needed.

Financial Institutions

Some financial institutions will not offer the low doc loan because of the massive risk involved with these types of products. There are a few lenders that offer the loans and they will walk you step by step through the process. You only need to arrange an appointment with your broker, bring your income declaration form and they will do the rest. These loan products take a little longer so you will need to be patient because they will research you, and your company, before making a decision.

Loan Requirements

Your income declaration form and good credit profile are the two main requirements. However, it is important to keep in mind that you may also need to have assets to show as collateral. This is especially true of business loans that have bad credit.

 Typically, it is the bad credit business loans that might consider low doc loans to be an option, but the creditors would consider such applicants as high-risk propositions. However, you could override this situation if you could show some asset as collateral. This becomes a requirement for your low documentation loan.

Act Quickly

Many financial institutions and financial advisors are doing away with these loan types. The risk is too large for most financial institutions. These loans are also catching the attention of the IRS and people that have received these loans are now under a magnifying glass. It is too easy for fraud to be committed when there is very little proof of income.

Low doc loans are quite easy to get and even easier to default on. Be very careful, and make sure that you can afford the payments before accepting the loan. Keep in mind that you may be investigated a bit, but if you need the loan and are not committed to being fraudulent you will not have any problems. Getting a low doc loan is easier than typical loans, so you need to make the move while we still have the option.