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Benefits of Low Doc Commercial Loans?

Now many investors in the international market have started investing in the small-scale businesses, and they even help to some startup businesses to raise their fund. But some business owners do not show their total and genuine income in the income tax returns and they are often not able to get some commercial loans for their business. In this case, they can apply for the low doc commercial loans from the private lenders. Some lenders provide these loans after checking the credit history of the borrowers, and some of them check the commercial property value of the borrowers.  However, these low doc commercial loans can be utilized as a capital for your business, and if you have a large amount of cash for operating your business, then you can apply for these loans by submitting few documents to the lenders. 

Low Doc Commercial Loans
Low Doc Commercial Loans

What are the advantages of low doc commercial loans?

  • In the case of low doc commercial loans, you do not need to produce your income statements and tax returns. If you have any retail shops or restaurants then you can produce your traditional operating statements to the lenders, and they will check your income in last two years through these statements. Afterward, they will disburse your loans based on these statements only. 
  • Most of the lenders can offer your long-term tenure for these loans and you can easily repay the loan within 20 to 30 years. But if you want to avoid any hidden cost like pre-payment charges and overdue fines then you need to choose short tenure loans only. 
  • Low doc commercial loans can charge your higher rate of interest, but if you compare the interest rate of several private lenders and banks, then you can save your amount. In this case, you can also add your property to your loan statement and use it as property loans at any time. Then your interest rate will be reduced, and you need to pay less amount. 
  • For low doc commercial loans, you do not need to go through a lengthy documentation process, and you will get the loans within a short time. If you want some hard cash for your business in an emergency, then you can go for these loans.   

Are the low doc commercial loans beneficial for your business?

Low doc commercial loans and the normal business loans are almost same. But the interest rate of the low doc commercial loans is higher than other loans because here banks and lenders should take the risk. Some business owners are often able to update their tax returns, and they are often not able to produce their financial documents to the banks. But they have a steady income and bank will reduce the documentation and verification process for these borrowers. But in this case, the applicant should submit a self-certificate stated that they could repay the loans without any problems. This is called as low doc commercial loan. 
Low Doc Commercial Loans
Low Doc Commercial Loans
  • If you have bad credit score then also you can apply for the low doc commercial loans, and you can invest this amount in your business. So, it is beneficial for you and banks will never check your credit score for this loan. But you need to mortgage some of your assets like property, business or homes to the banks to avail these loans. 
  • Banks and the private lenders can provide 60% to 80% of the value of your property as loans. But if you repay the loan timely then banks will offer you the refinance facility, and if you need more cash, then you can refinance your existing loan and increase the amount again. 
So low doc commercial loan is beneficial for small businesses, and people who do not have any papers and income tax returns, can opt for these loans.

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