No doc business loans: the three documents that replace the paperwork

What Paul says

Paul Stone, who founded HomeSec in 2004, sets the picture most people have of a business loan against what HomeSec actually asks for. The usual picture is tax returns, a business plan, profit and loss statements and weeks of questions going back and forth. His list has three items on it: the rates notice, the mortgage statement and photo ID. With those, he says, a loan document can be sent to the borrower to read and sign on a phone, and the money follows once the final checks are done.

What each document is for

• The council rates notice. The council sends it to the owner of the land, so it confirms the property, its address and who owns it, and it gives HomeSec what it needs to search the title. A lost one can be reissued; how to get a council rates notice explains how.
• The mortgage statement. It shows who holds any existing mortgage and roughly what is owed. That decides whether HomeSec lends first or second, and how much equity there is to lend against.
• Photo ID. Everyone on the title signs the loan, so everyone on the title is identified, including a co-owner who has nothing to do with the business.

Why financials are not on the list

Financial statements answer one question: can the business's income meet the repayments? That is the right question for a lender whose only protection is that income. A loan secured on property is protected by the property, so the assessment asks something else: is there enough equity, and is there a realistic way out, such as a sale, a refinance or a payment already on its way? That is why a business with its books two years behind, a new company with no trading history, or one coming out of a bad year can still be assessed. It is also why the purpose matters so much. HomeSec provides credit wholly and exclusively for business and investment purposes.

What the three documents do not replace

A short list removes paperwork, not judgement. The title is searched, the property's value at today's market is assessed in house (Paul explains how in a separate video), the purpose is confirmed and a person signs off the decision. Where a file slows down, it is almost never the documents: it is a second mortgage waiting on the first lender's consent, a co-owner who has not been told, or a settlement date that depends on someone else. The video's timing is the best case; the box below gives the published terms. The full guide to no doc business loans covers who they suit and where low doc fits instead.