No-Doc Business Loans vs Low-Doc Business Loans: Which Is the More Profitable?

A Lo Doc or sometimes called a Lo Doc Home Loan are home or mortgage loans where no documentation is required to verify your income. But all other documentation is. These types of loans are ideal for self-employed, independent investors and contractors, credit-impaired customers, ex-bankruptcies, or customers with current mortgage arrears, as well as borrowers who have been turned down by traditional lenders. Listing individuals with adequate earnings but to meet bank verification requires money and valuable time.

Low Doc Home Loans and Business Loans are typically a bit more costly than traditional business loans as a result of the higher risk profile. This is mainly for individuals who are moving to buy investment assets, residential property, or refinance existing home properties and do not have current pay or tax returns to confirm their earnings, which generally supports a standard business loan.

There are three main kinds of No Doc Business Loans or Low Doc Business Loans.

No Ratio Loans

These types of loans are for lenders who do not want to disclose their earnings. Therefore, there is no debt-to-income ratio that the lender must consider. The borrower’s good credit and abundant properties make up for the lender not allowing for the borrower’s income data. Whether collecting income documentation is going to be a logistical nightmare, then this loan can provide an easy and quick procedure. Visit to read about Low-Cost Loan Explained, and How Does It Work?

No Doc Business Loans

No Doc Commercial Loans are not provided through banks, however, through specific lenders who are eager to take the risk. The borrower self-reports their business revenue and no documentation is needed with this kind of loan. No Doc Commercial Loans are asset-backed, with the price of the assets used as collateral at a greater value than the amount of the loan. That’s why they are also called Asset loans. Even though there is no documentation, non-document lenders will typically do some kind of credit evaluation before they approve the loan.

Low Doc Business Loans

When your earning fluctuates from week to week, month to month, Low Doc Loans or Stated Income Loans are the most attractive. Unlike No Doc Loans, however, the Low Doc Loan needs the lender to disclose incomes, typically over two years, as well as you may be required to show tax returns and bank statements.

Talk to a mortgage expert if you consider a Low Doc Loan or a No Doc Loan appropriate for your current situation. It may be to your advantage to pay a higher rate for this type of loan. Also, a good mortgage banker can show you how to get the required documentation. You can also read about The documents you need for your home loan application by clicking here.

Bottom Line

No Doc Business Loans and Low Doc Business Loans require a little paperwork as well as saving time. However, there are many other alternatives to consider. One that has been increasing in popularity among small business owners is unsecured commercial loans. These types of loans require the least documentation and may be accepted within 24 hours.