Revealed! Secrets of No Documentation Business Line Of Credit
I am going to talk to you about no documentation business line of credit in this article and how you can easily acquire this type of credit lines for your business. But, before I do that let me first explain what the term really is; of course from the layperson's view point.
Simply stated, it is the type of borrowing where essentially no documentation is required by the lender. Thus lenders rely heavily on your credit, and in some cases assets as the basis for making the loan. But when used in business lending it is more towards limited paperwork and hence the name limited documentation loans.
Both are used interchangeably.
In the capital marketplace whenever you hear the term no-documentation loans or lines of credit, you will also hear no-income verification loans. Lenders refer to all these as "no-doc" loans. And, they're all grouped under the broad term Sub-prime or Non-prime Lending. With sub-prime funding, loan requirements are more relaxed than other type of financing.
Whether it's no documentation business line of credit or no income verification loans, non-prime lending is certainly not dead. But new guidelines have made them a little tougher for borrowers and brokers to get quick approvals like they used to be.
In fact one great way to raise large sums of business capital fast is to use lines of credit. Once you have established one, it can be used at any time for any business purpose you choose, and you don't have to pay any interest until you draw on it.
Here is how you go about securing your no documentation business credit line. First. Call several lenders in your local area. They could be banks or non-traditional lenders like finance companies or equity lenders. I prefer the non-traditional lenders because they are willing to take more risk than banks though the rates on their loans tend to be higher.
Next. Find out which of the lenders offer lines of credit -- not all lenders do. Also, find out what their terms are, what they base their credit decision on, and the amount of their annual fees. Here's the secret... Line up several of these lenders, and send applications to them at approximately the same time. That way, you may be accepted by several lenders at once.
Generally you can arrange anywhere from $2,500 to $50,000 or more. Once you are approved, you will receive a book of checks. You can use these checks at any time for any purpose, and you pay interest only on the outstanding balance.
Regarding payment, you are required to pay back only interest plus a small amount of the loan each month, making the payments very reasonable. Some of these financing require a monthly payment that covers only the interest accrued. And since most holders of this type of capital are considered preferred borrowers, the interest charge is usually just a few percentage points over the prime rate, making this very inexpensive way to borrow.
Additionally, these loans are usually unsecured. This means that they are not backed by anything except your promise to repay and your previous credit track record. You don't have to tie up any of your assets to secure the loan! And, that's why seasoned borrower raise large sums of money using the no documentation business lines of credit.
Peter Forkuo, the author of this article is a business funding consultant. For years he has coached and assisted small business owners acquire business financing where traditional lenders have not been helpful. If you have a situation where traditional lenders have failed, you may want to look into his widely-used program available here--> no documentation business line of credit
Source: http://ezinearticles.com/
Added: April 6, 2008
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