Has your small business been denied a loan before? Cash flow for equipment, office space, training, and other vital resources can be low for small businesses like yours. When loans rely on liquidity or income tax returns, you simply may not qualify. There’s an easy, painless answer for small business owners just like you. The answer is stated income loans.
What Is A Stated Income Loan?
A stated income loan is a type of loan that doesn’t rely on your income, pay stubs, or tax returns. Instead, you tell the lender what your income is, and they base their decision on this. The lender will then ask you to verify this income with bank statements, rent rolls, leases, commercial income properties, or profit and loss statements rather than tax returns and other documents traditional loans require.
What Can I Use A Stated Income Loan For?
Stated income loans can be used for various purposes. One of the uses that really stands out is debt consolidation. Paying on several different loans, especially those with high interest, can be a drain on your income.
You can also use one of these to buy or improve a property. If you’re paying rent or found the perfect property for your business? A stated income loan will help you to purchase it without the hassles of other loans.
Maybe you need to refinance a higher interest loan or have a mortgage with a balloon payment. You can refinance with a stated income loan.
Last, many small businesses need a boost of working capital. If you’re waiting on outstanding invoices or receivables, you may need cash for inventory or equipment. Without a loan, your business might be in a bind. Stated income loans can help.
What Types Of Properties Qualify For Stated Income Loans?
A wide variety of properties qualify for stated income loans, so your business is likely to be on the list. Office, Self-storage, automotive, daycare, warehouse, industrial, retail, and business owner-occupied properties are eligible. Other properties like multifamily, mixed-use, and investment properties can also use these loans. Don’t see your property on the list? Don’t worry; you could still qualify!
What Are The Benefits Of A Stated Income Loan?
You’d be surprised at the number of benefits that come with these loans. First, you don’t need to present your tax returns. You’ll only need about 3 – 6 months of principal and income in reserve. You can get up to 75% loan to value on most properties. Seasoning of the title is not required.
Attractive Loan Details
You might be wondering what your loan details might look like. You can get loan amounts from $150,000 to $2,000,000. You’ll enjoy rates starting as low as 6%. You’ll only need a credit score of 650 to be considered. Thirty-year amortization is available. Speak with your lender for more details.
Stated Income Loan Success Stories
We have many success stories, but we’ll share just a few with you.
One such story is an auto mechanic who rented his shop for 12 years. He decided he was tired of renting, but he kept getting turned down. Due to his expenses, his income wasn’t reported on his tax returns. His debt to income (both personal and business) was too high. We were able to secure a 30-year mortgage with 25% down. His mortgage is $500 a month less than he was paying in rent. We were able to write this loan using the last 12 months of business bank statements and a credit report.
Another story is a refinanced building. The client purchased the property with a construction loan to tear down the building and build a 4-story condo building. Then the financial crisis of 2008 happened. That forced her to convert the loan into a long term banknote. She ran into some cash flow issues and was late on a payment. She had a judgment lien filed against her, and her interest rate rose to 13%.
The client was self-employed and didn’t show much income. The property was fully occupied, and cash flowed. We were able to refinance her and get her released from her loan. She’s no longer paying 13% interest, and the weight has been lifted from her.
Like these great clients, you can also benefit from a stated income loan. Especially businesses in states such as Texas, California and Florida.
Are you interested in learning more about stated income loans or applying? Start your application!