Compare no-doc business lines of credit

If you need extra funding to cover inventory costs or payroll during a slow season, a no-doc business line of credit could provide financing in as little as 24 hours. To qualify, you’ll need to meet minimum credit score and revenue requirements, and some lenders may require you to have been in business for at least two years.

What is a no-doc business line of credit?

No- or low-doc lenders typically only require a credit check, minimum annual revenues and a few months of bank statements to qualify. Most lenders can connect directly to your business bank account to verify deposits and other transaction history, eliminating the need to submit a mountain of paperwork.

A no-doc business line of credit is a flexible form of financing for small businesses that works similarly to a credit card. However, withdrawals are typically deposited directly into your business bank account, giving you access to cash rather than credit. The lender sets a borrowing limit the borrower can draw from as needed. Borrowers are only required to make interest payments during the draw period.

You can repay what you borrow during the draw period, but once the draw period ends, you have to pay off the balance in weekly or monthly installments. Most business lines of credit have loan terms of one to two years, but some lenders may offer longer terms. Interest rates for lines of credit are usually variable, so your repayments may fluctuate. And, you may even be able to land a line of credit with no personal guarantee required.

Compare no-doc or low-doc business lines of credit

Compare these lenders and partner networks that offer low- or no-doc business lines of credit, including borrowing limits, minimum credit scores and some basic requirements.

Pros and cons of no-doc business lines of credit

No-doc lines of credit can be a huge benefit to businesses that need flexible funding, but it’s important to consider the advantages and disadvantages.

Pros

• Fast funding. By eliminating the need for extensive documentation, lenders can approve lines of credit within minutes or hours, and funding can occur as soon as the next day.
• Flexible borrowing. Rather than borrowing a lump sum, companies can withdraw only as much as they need, multiple times, up to their borrowing limit.
• Low initial cost. Interest-only payments during the draw period can keep costs low at the beginning. Plus, interest rates are usually lower than with credit cards.
• Only repay what you borrow. If you don’t need to borrow up to your limit, you only have to repay what you use.
• Access to cash. Unlike a business credit card, lines of credit give you access to cash to pay for things that credit can’t typically cover, such as payroll, rent or utilities.
• Build business credit. If you manage your line of credit responsibly, you can build your business credit, making it easier to secure other business financing in the future.

Cons

• Lower loan amounts. Borrowing limits are typically lower than you could get with a business term loan.
• More fees. A line of credit often comes with more fees than other types of lending, such as annual fees, transaction fees or monthly maintenance fees.
• Higher rates. Interest rates for business lines of credit are typically higher than for term loans.
• Minimum withdrawals. Some lenders that offer no-doc business lines of credit might have minimum withdrawal requirements, so you may have to take out more than you need.

How to get a no-doc business line of credit

Follow these seven steps to find lenders and apply for a line of credit that meets your business needs.

1. Decide how much you need. While a no-doc lender ultimately determines your borrowing limit based on credit score and revenues, keep a number in mind when comparing appropriate lenders.
2. Check your credit scores. No-doc lenders typically have minimum credit score requirements, so know your score and apply accordingly.
3. Check lender requirements. Briefly research lenders’ other minimum requirements to make sure you meet the criteria to qualify.
4. Compare lenders. Once you’ve identified lenders that fit your needs and qualifications, compare interest rates, fees and loan terms to find the best deal on a no-doc loan.
5. Get prequalified. Getting prequalified by one or more lenders can give you a better idea of the rate and loan terms you’ll ultimately qualify for.
6. Fill out the application. Nearly all lenders that offer no-doc business lines of credit provide straightforward online applications. This step is also when you link your business bank account for faster approval time.
7. Wait for a response. Some no-doc lenders say you’ll have your answer in minutes, but it usually doesn’t take more than a few hours or a day to find out if you qualify. If approved, you could see funds in your account as early as the next business day.

How to qualify

Lenders that offer no-doc business lines of credit vary on specific requirements, but here are the general criteria they’re looking for:

• Minimum credit score. Many no-doc lenders require credit scores of 600 or more, but others have more lenient requirements.
• Minimum revenues. Each lender verifies that your business brings in the minimum monthly or yearly revenues needed to qualify for the loan. Your revenues (and credit scores) also help determine your borrowing limit and interest rate.
• Years in business. Business lenders generally require your business to be at least two years old, but some no-doc specialists may only require six months to a year.

Other types of no-doc business lending

• Best no-doc business loans
• No-doc business loans for LLCs
• EIN-only business loans

Bottom line

A no- or low-doc business line of credit can help businesses obtain funding to deal with ongoing cash flow needs, expand payroll or meet other business needs. The application process is fast and easy, and if you link your business bank account, you could receive the funds in as little as 24 hours. A line of credit is also a great way to build your business credit.

On the other hand, the lack of extensive documentation could mean higher interest rates than other types of business lending, which have a more rigorous approval process.

Frequently asked questions

What does no-doc loan really mean?

“No-doc” loans are actually a bit of a misnomer, but it does mean a lot less paperwork. It also refers to linking your business accounts with the lender so they can verify your financials without the exchange of physical documents.

“While termed no-doc, these loans often require some basic documentation, such as proof of identity and business existence,” explains Michael Baynes, co-founder and CEO of Clarify Capital, “The no-doc aspect typically refers to the omission of financial documents.”

Can startup businesses qualify for a no-doc business line of credit?

Most lenders that offer no-doc lines of credit require that businesses meet time-in-business and revenue requirements. If your business doesn’t meet those requirements, this type of lending may be out of reach. However, some LOC lenders specialize in startup business loans.

Can you get a no-doc line of credit with bad credit?

No-doc lenders typically rely mainly on credit scores and revenues to approve business credit lines. And although most lenders require a score of at least 600, some lenders work with borrowers with lower scores.

To make sure you get accurate and helpful information, this guide has been edited by Megan B. Shepherd as part of our fact-checking process.

Written by

Lacey Stark

Writer

Lacey Stark is a freelance personal finance writer for Finder, specializing in banking, loans, investing, estate planning, and more. She has 20 years of experience writing and editing for magazines, newspapers, and online publications. A word nerd from childhood, Lacey officially got her start reporting on live sporting events and moved on to cover topics such as construction, technology, and travel before finding her niche in personal finance. Originally from New England, she received her bachelor’s degree from the University of Denver and completed a postgraduate journalism program at Metropolitan State University also in Denver. She currently lives in Chicagoland with her dog Chunk and likes to read and play golf. See full bio