About Stated Income

So, how do you get your funding? You'll only need to state your income on the loan application to any of the many commercial lenders that gladly finance commercial property for business owners that occupy the property themselves. Unlike banks, whose charters require extensive income and expense documentation in addition to other lending restrictions, commercial lenders have much broader lending guidelines. So, how do you get your funding? You'll only need to state your income on the loan application to any of the many commercial lenders that gladly finance commercial property for business owners that occupy the property themselves. Unlike banks, whose charters require extensive income and expense documentation in addition to other lending restrictions, commercial lenders have much broader lending guidelines.

To qualify you should have a good credit history and have at least 2 years in the business. But if you're worrying whether the terms will be overly burdensome without documented income, consider this; With 30 year amortizations, 5 to 10 years longer than banks allow, and with comparable to slightly higher rates, payments for stated income loans should be about what your bank would have offered for a fully documented loan.

Many commercial lenders fund higher maximum LTVs (loan to values) for stated income loans than do banks, as high as 90%. Higher loan amounts are an added benefit as most banks' charters restrict lending higher than 75% LTVs for purchases and lower still for cash out refinance loans. Eligible properties include, offices, warehouses, office condos retail, and mixed use property as well as specific use properties like auto repair, dry cleaners and others.



  COMMERCIAL LENDERS BANKS
INCOME PROOF STATED income loans ideally suited for owners who can not show proof of income. Full documentation programs also available. 3 years income tax returns and other income proving documentation required.
DSCR (Debt Service Coverage Ratios) Multi-family ratios low as .80 of property net income for full doc loans in certain expensive markets and 1.05 in all markets. Other commercial typically require 1.10 DSCR Banks typically require 1.2 to 1.25 or higher across the board.
LTV - Loan to Value Ratio 80% LTV with up to 90% CLTV allowing seller carried seconds on 5+ units purchases and refi to 75% is typical. 90% LTV commercial purchases and refinances. Banks do not allow over 75% financing on purchase and lower on refinance.
Payments and Terms Interest only and 30 year amortizations with fixed terms as long as 30 year are common making for lower payments Banks normally lend fixed for 5 years, amortized 20 to 25 years.
Property Restrictions All types of property always financed by individual commercial lenders, including special use like gas stations, auto repair, churches, mini-storage, and many more. Banks restrict their lending to mainstream, property types. Rarely lend for special use property and stop lending on each property type when their portfolio becomes unbalanced - heavily invested in the specific property type.
Cash-Out Refinance Common and often limitless within debt service and LTV restrictions. Banks restrict their lending to mainstream, property types. Rarely lend for special use property and stop lending on each property type when their portfolio becomes unbalanced - heavily invested in the specific property type
Relationships Lenders do not require prior relationships and are not depositories for borrowers. Banks will often only lend to borrowers who run their deposits through the bank and maintain minimum balances.


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