LowDoc

This loan program from the SBA makes applying for a loan of$150,000 or less somewhat easy. “LowDoc” stands for “lowdocumentation,” and approval relies heavily on your personal creditrating and your business’s cash flow.

The LowDow Program was created in response to complaints thatthe SBA’s loan application process for smaller loans was needlesslycumbersome for both borrowers and lenders that participate in theSBA’s 7(a) General Business Loan Guaranty Program. The processtended to discourage borrowers from applying and lenders frommaking loans of less than $100,000.

LowDoc streamlines the loan application process for guaranteedloans under $100,000. The approval process relies heavily on alender’s experience and judgment of a borrower’s credit history andcharacter. The primary considerations are the borrower’swillingness and ability to repay debts, as shown by their personaland business credit history, and by past or projected cash flow. Nopredetermined percentage of equity is required, and lack of fullcollateral isn’t necessarily a determining factor.

Applicants seeking less than $50,000 are required to completejust a one-page SBA form. Those seeking $50,001 to $150,000 submitthe same short form, plus supply copies of individual income taxreturns for the previous three years and financial statements fromall guarantors and co-owners of the business. Commercial lendersare likely to require additional paperwork to satisfy their ownrequirements. The SBA guarantees a 36-hour turnaround on these loanrequests.