Securing a loan from a traditional finance source is not always the most straightforward process in today’s environment. New laws and regulations might make it difficult for company owners to acquire or refinance commercial property using a commercial loan from a bank. They not only look at the debt service coverage ratio of a property but also the owner’s or buyer’s personal debt to income ratio. Due to these rigorous standards and the constantly rising need for supporting paperwork, many investors and company owners cannot qualify for a bank loan.
Stated income commercial loans are mortgages that consider the amount of income the applicant has access to repay the loan. When available equity is what matters in commercial financing, the applicant’s income is commonly mentioned but not confirmed. Using this underwriting approach enables loan transactions to finalize and fund faster because the borrower doesn’t have to provide so much documentation of income that would have to be examined.
Stated income commercial real estate loans can be used to acquire residential and commercial properties and can be applicable to refinances, cash-out refinances, and cash-out second mortgages. Some lending institutions also provide stated income loans for self-employed individuals.
How Do Businesses Use Stated Income Commercial Real Estate Financing?
Organizations that choose to use stated income commercial real estate financing may use the funding to obtain real estate that benefits the business. This may include office or retail real estate, apartments, warehouses, food service real estate, or rental properties.
Besides acquiring real estate, some organizations employ stated income commercial real estate financing to consolidate debt, make modifications to property, refinance a mortgage with a higher interest rate or obtain working capital.
Benefits of Obtaining a Stated Income Commercial Real Estate Loan
When using a bank to acquire a loan, a company needs to produce volumes of documentation and account statements confirming their revenue and credit. On the other hand, the requirements for stated income real estate financing are easy to understand and to meet. As long as the revenue value of a property can pay taxes, mortgage, and insurance, approval should be no problem.
With less attention on the credit history a business has and more on the real estate itself, obtaining stated income commercial real estate financing is a great option for companies who are seeking a quick, simple solution.
Consider these facts to determine if a stated income commercial real estate loan is a good fit for you:
- Loan-to-value ratios of up to 75%
- Applicants can qualify with credit scores as low as 600
- Funding can be used for many commercial purposes
- Almost any form of property can qualify
- Large loan amounts are available
We Can Help
To learn more about our stated income commercial real estate financing, call POM (Peace of Mind) Capital & Funding Services at (631) 354-9290 or write to us at [email protected] to schedule a free consultation with our team.
POM Capital & Funding Services is a leading provider of alternative funding solutions for businesses of all types and sizes, offering commercial finance solutions and products to businesses in the Centerport, New York area and throughout the state of New York.