Low doc commercial finance is loans that are provided through various private financial institutions that do not require much of paper work as required by the banks. If you do not have all the required documents necessary for the application of a commercial loan, then this is the best you can try. Today, let us discuss frequently asked questions about the low doc commercial finance.
What is low doc commercial finance?
Low doc commercial finance is a loan that is provided without the help of a heavy paper work like that required for the loan application in a bank. If you have a business and you do not have all the necessary papers required then you can apply for a low doc commercial loan. You do not need to show your income proof for the approval of the loan. Instead, you need to quote your income based on which the income is estimated. There is a lot of competition in the market regarding this, but with the help of a professional, you can easily choose the most appropriate one for you.
How much can you borrow from low doc commercial finance system?
You can borrow up to 80% of the value of the commercial property in case you are buying one. In addition, you can get up to 80% of the value of any property that you own to buy your commercial property. In case of refinancing, you can get up to 100% of your value. Therefore, you can get a handsome percentage of loan amount for your commercial purpose.
What are the required documents for low doc commercial finance?
In most of the cases, a business owner uses the low doc commercial finance to buy business premises. All you need is an income declaration regarding your current income status along with accounts statement and the bank account statements. In some cases, you may also need the lease or rent history of your commercial purpose, but again this varies. However, this is way more hassle-free then the documentation required in the banking loan procedure.
What are the documents that can put as income statements?
If you want to make your income declaration stronger, then you can put up some related documents that can help you to make it a stronger application. The documents that can be put up are:
- Profit statements about the growth of the business over the years. The turnover of the previous year’s put up as a statement can be a good option to make the case stronger.
- Financial statements are always the best supporting document for the income declaration.
- If possible then you can pre-pay the interest amount and only the principal remain and this can make your case almost like that of a full doc loan and can be the best support to your income declaration.
What are the interest rates related to the low doc commercial finance?
Although, the low doc commercial finance system may seem to be a very costly or high interest rated financial option, yet to make it clearer. It should be noted that there is a difference, but the margin is not a vast one. The rate of interest depends on the risk involved and the amount of your deposit along with the documents provided as an alternative income to repay. The lower the risk, lower the interest rate. Some institutions also provide fixed interest rates. There are also banks that have an option of low doc commercial finance under certain provisions alongside their normal loan procedure.