No Doc Business Loans: The Ultimate Guide

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Do No Doc Business Loans Exist?

If you’re on the hunt for small business loans, then you should ask yourself if you’re ready for the application process—getting a business loan takes a lot of time.

If you need fast financing without the hassle, then you might want to consider no doc business loans. We’re talking business financing that takes few or no documents to get through the application process. These business loans do exist, and they can be a huge asset to small business owners.

In this guide, we’ll walk through all the no doc business loans available and what you need to know about each.

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No Doc Business Loans: The Best Options

There are many types of business loans that you can apply for without providing any documents—or with only a few documents. Here are your best options:

Merchant Cash Advances

When you search for no doc business loans, odds are the first type of business loan that will come up is a merchant cash advance (MCA).

Essentially, merchant cash advance companies advance you a sum of money by purchasing your future credit card sales. This means that to repay this advance, you’ll allow the lender to take a fixed percentage of your credit card and debit card sales each day until you’ve repaid the total sum, plus interest.

Merchant cash advances are hands-down the most accessible financing products on the market. They really are no doc business loans.

To apply, you’ll likely only need to provide your social security number, address, and tax ID to verify your credit score. Some merchant cash advance companies might require you to sync your bank statements or your credit card processing statements just to get a sense of what revenue volume you’re bringing in on average.

The application process couldn’t be simpler, but it’s important to note that MCAs are the most expensive financing option on the market. These lenders calculate your interest in terms of a factor rate, which is often much higher than other business funding options. Plus, daily repayments mean your business’s cash flow could be seriously affected.

Merchant cash advances are absolutely no doc business loans, but they should be avoided if you can qualify for a different financing solution with lower rates and better terms.

If you’re intent on pursuing a merchant cash advance, here are a few lenders you should consider working with:

    Rapid Finance

    Rapid Finance can offer funding to business owners who have a credit score of 580 or higher. Your business must have been operating for at least one year and make at least $5,000 per month in revenue.

    The advance amounts from Rapid Finance go up to $1 million, with factor rates ranging between 1.16 to 1.3. The longer you’ve been in business, the larger the advance (as high as 250% of your monthly sales) and the lower the rate Rapid Finance can offer you.

     

    CAN Capital

    CAN Capital can provide your business with merchant cash advances ranging between $2,500 and $250,000, with daily automatic payments. You can acquire funding in as little as three days, but you’ll pay factor rates from 1.15 to 1.48, making CAN Capital a little more expensive than Rapid Finance.

Short-Term Loans

Next up on the list of no doc business loans are short-term loans.

Short-term loans are like the term loans you know well, but with a few key differences.

They’re lump sum loans that get repaid over a set period of time with regular payments, including interest.

However, short-term loans have, as their name implies, shorter terms. Terms last for only three to 18 months, and you’ll repay the capital with daily or weekly repayments. Loan amounts go up to $250,000 and rates range from to 10% to a lot higher—even up to 100%.

Short-term loans are particularly good options when you have working capital needs, or one-off business investments or expenses you need to make.

However, short-term loans aren’t entirely no doc business loans.

You’ll need some paperwork to apply to short-term loans, but what you need to provide will be very minimal.

Here’s the list of what you might need, as a maximum:

  • Tax ID
  • Social security number
  • Bank statements
  • Credit score
  • Personal tax returns

Let’s look at a few short-term lenders that could work for your business:

    LoanBuilder, a PayPal Service

    Convenience is the name of the game for the LoanBuilder program.

    While not technically a no doc business loan option, LoanBuilder boasts pre-approvals in just five minutes. This short-term loan has convenient automatic daily repayment transfers pulled from your business checking account.

    The average time to funding is three business days for loans ranging from $5,000 to $75,000 with terms of 13 to 52 weeks.

    OnDeck Capital

    With a minimum personal FICO score of just 500, OnDeck offers short-term loans to business owners with poor personal credit.

    In their application process, they’ll look to see that your business has been operating for at least one year and has at least $100,000 in annual revenue.

    Again, these aren’t true no doc business loans, but you don’t need extensive documentation to apply for their funding. You’ll only need three months of business bank statements, a driver’s license, and a voided business check.

Short-Term Lines of Credit

With short-term lines of credit, you’ll have access to a pool of funds that you can tap into for any business-related expenses. You only pay interest on the amount you draw, and once you pay it back with interest, your credit line gets refilled to its original amount.

Similar to short-term loans, these lines of credit offer smaller amounts over shorter repayment periods and at higher rates.

Because they are extremely accessible with little documentation requirements, short-term lines of credit come with higher interest rates than many products, ranging from 10% to 80%.

Here’s a list of the documents you’ll need to apply:

  • Driver’s license
  • Voided business check
  • Bank statements
  • Credit score
  • Personal tax returns

Here are some short-term line of credit lenders we recommend working with:

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    Kabbage

    Kabbage offers a line of credit that helps provide working capital for business owners who need very accessible financing. Lines of credit with Kabbage range from $2,000 to $150,000.

    As far as no doc business loans go, Kabbage comes pretty close. In fact, there’s no physical paperwork you’ll need to submit, and very little information to upload.

    To apply, you’ll create a Kabbage account, give basic business information that we outline above, and connect the financial platform you use.

    Kabbage will then pull data from the integration to underwrite your loan.

    BlueVine

    Another great short-term line of credit lender is BlueVine. With BlueVine, you can secure a line of credit up to $250,000 on a term of six or 12 months with interest rates ranging between 4.8% and 51%.

    While BlueVine isn’t a no doc business lender, you’ll only need a few documents to apply:

    • Three months of bank statements
    • Copy of invoices

    Other qualifications include at least $100,000 in annual revenue, a personal credit score over 600, and at least six months time in business.

Invoice Financing

The next close-to no doc business loan is invoice financing.

Invoice financing essentially gives you an advance on your outstanding invoices, freeing up your cash flow. Invoice financing companies advance you a lump sum amount that’s typically a large percentage of the value of the outstanding invoice in question—around 85%.

Invoice financing is a great option for borrowers with less-than-stellar credit, little time in business, and in need of fast, accessible funding, as your eligibility for this financing largely depends on the details of your outstanding invoices and customers’ payment history (and less on your own financials).

What’s more, the application process with invoice financing is simple. Really, the most important part of your application will be your outstanding invoices.

Here’s your list of everything you might need to provide for the application:

  • Driver’s license
  • Voided business check
  • Bank statements
  • Credit score
  • Outstanding invoices

If you think invoice financing could be a good solution for your business, check out these lenders:

    Fundbox

    Fundbox offers cash advances based on your outstanding invoices, up to $100,000 in value. They’ll charge about a 0.5% factor fee for each week the invoice goes unpaid, and typically extend financing for 12 months.

    It’s extremely easy and fast to apply with Fundbox. You’ll only need to sync the accounting software you use (QuickBooks Online, QuickBooks Desktop, Freshbooks, Harvest, Wave, Xero, etc.) and on average you can be approved in one day.

    BlueVine

    BlueVine doesn’t just provide lines of credit. Through BlueVine, you can also get an invoice financing product that rivals Fundbox’s. Invoice financing with BlueVine can go up to $2.5 million—meaning they have the capacity to work with much bigger businesses.

    You’ll need a personal credit score of at least 530 and a minimum annual revenue of $100,000 to qualify, but the application process is very simple:

    You’ll need your accounts receivable aging, three months of business bank statements, and general information about your business.

No Doc Business Loans: What You Need to Know

If you looked for “no doc” business loans about 10 years ago, you wouldn’t have had any options.

That’s because 10 years ago, the only real option for getting a business loan was from a traditional bank.

And traditional banks are certainly not offering small business loans without extensive documentation.

Instead, they have the lengthiest application process around. On average, business owners spend 25 hours on applications for bank loans, according to this Harvard Business School study.

And oftentimes, that effort and time compiling mountains of paperwork is for naught: Bank loans are difficult to qualify for and many small business owners get rejected.

Fortunately for small business owners, over the last 10 years a variety of alternative lenders have emerged, offering different loan products with higher approval rates.

These alternative lenders offer what banks do not: fast, accessible loan options. So when you’re looking for no doc business loans, you’ll want to direct your search to alternative lenders operating in the business funding market. Let’s take a closer look at your specific funding options and the lenders that provide them.

Advantages of No Doc Business Loans

Now that you know all about no doc business loans and the options available to you, you might be wondering what the benefits of this type of loan are over a traditional bank loan.

There are several distinct advantages to no doc business loans, including:

    Online Applications

    Alternative lenders are mostly operating online—meaning their applications are online as well.

    By using technology to process your loan application and algorithms to underwrite the loan itself, these lenders don’t need to see as many documents from the borrower.

    Instead, these no doc business loans are available by just syncing your business bank account or accounting software. Then the lender’s technology gets to work and collects the information the lender will use to determine if you qualify for their financing product.

    Faster Time to Funding

    No doc business loans can be acquired much faster than bank loans.

    That’s because alternative lenders are not traditional banking institutions—meaning they’re not subject to the same government regulations as the big banks are. Banks make loans using money from personal checking and savings accounts and thus are heavily regulated on how they can lend out their customers’ money. Alternative, non-bank lenders get money from other sources—like hedge funds, accredited investors, or secured lines of credit.

    This is another reason why alternative lenders don’t require as much paperwork—like a business plan or full financials.

    While a bank needs to see everything, an alternative lender only needs to see specific documentation that they deem important.

    The technology aspect also plays a big role in the speed of alternative lenders. With efficient underwriting programs and highly automated applications, alternative lenders can process more small business loan applications in less time.

Disadvantages of No Doc Business Loans

The convenience of no doc business loans comes with a (literal) cost. Here is the biggest drawback to opting for this type of small business loan:

    High Interest Rates

    Banks charge lower interest rates because they’re so selective with their borrowers. If they only lend to business owners with long and successful track records, they can be more confident that they’ll get their money back.

    Alternative lenders don’t spend as much time looking at paperwork to see if you’re a qualified borrower. Therefore, they won’t have as good of a sense of your revenue, cash flow, and general financial stability. And in general, alternative lenders accept entrepreneurs with shorter business histories, lower credit scores, and less proven revenues and cash flow.

    In order to balance the scales out and compensate for the risk of lending to you, alternative lenders are forced to charge higher interest rates. That way, even if they only get a portion of the loan repayments, they’ll end up getting a fair amount of their money back.

    With no doc business lenders, your interest rate depends on the typical factors like credit score, annual revenue, and time in business.

    But these lenders are more lenient with their requirements, meaning you should expect to see higher interest rates on loans that are easy to apply for and require very few documents.

The Bottom Line

While very few business funding options require no documentation from the potential borrower, there are several options that only need very limited documentation. In many cases, you’ll be able to simply sync your bank account, provide some basic information on yourself and your business, and find out if you’re approved.

When it comes to these business loans, though, you need to be careful. Easy-to-access business loans can have exorbitantly high interest rates and uncomfortable repayment periods. If you can stand to handle a slightly more intensive application period and are slightly more qualified, you should look at your other options, including traditional term loans, longer-term lines of credit, or SBA loans instead.

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Vice President and Founding Editor at Fundera

Meredith Wood

Meredith Wood is the founding editor of the Fundera Ledger and a vice president at Fundera. She launched the Fundera Ledger in 2014 and has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending. She is a monthly columnist for AllBusiness, and her advice has appeared in the SBA, SCORE, Yahoo, Amex OPEN Forum, Fox Business, American Banker, Small Business Trends, MyCorporation, Small Biz Daily, StartupNation, and more. Email: meredith@fundera.com.
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