Stated Income Commercial Loan is a hassle free solution when looking out for financial support. Unlike the full document commercial loan, the SICL is light and does not require full documentation. In this type of loan, the borrower is not required to prove that they can afford loan re-payments from their own income or assets. Instead, this type of loan relies on the commercial property in which the loan is being invested either in terms of the property real estate value or the rentals it potentially can earn.
This kind of state income commercial loan is designed keeping the borrower’s benefit in mind. Here, the borrower need to come up with 30 down payment that can be from his owns funds or a combination of 20% of funds and a second mortgage from the current owner up to 10%. This kind of invested commercial property does not have to be possessed in the name of the borrower or the operating company but it can be held in the name of the holding company.
Since this loan is literally undemanding and easy on the borrower, it is usual done only on a first trust basis. Of course, this also depends on the type of commercial property, credit of the guarantor and the underwriting considerations.
Less Paper Work: The approval process is simple and involves minimum documentation, when compared to the more traditional commercial loan. In most cases, since the loan is only underwritten to the property cash flow or potential cash flow, it is not necessary to provide any detailed documentation, which would have been the case, if the borrower’s income was being assessed and tagged, to the loan.
Fast approval process: This commercial loan has a faster turn-around time, since the paper work is at its minimum. This loan lays emphasis more on the property cash flow hence the approval process is not hampered as against the case of conventional loan process, where the borrower’s income proof and credibility is scrutinized in detail before the approval takes place.
No verification is needed on the secondary repayment source such as the borrower’s income and also such loans usually come with a reduced credit scoring requirements making it easier and more flexible for the borrower.
This loan sees a quick closure, usually around 30-45 days from the start to finish of the commercial plan
Stated income commercial loans have a few simple terms that need to be fulfilled in order to be eligible for this loan.
- 1. The type of business for which the commercial loan is being applied for should have been in business at least for 2 full years2. Although the credit score is very relaxed, there still is a cap of 650 and above credit score of the guarantor to be eligible for this loan.3. The guarantor and the operating company cannot have bankruptcy that is more recent than 3 years
With the above pre-requisites in place, securing a loan is easy and hassle free.
1 Howe Ave, Suite 303
Passaic, NJ, 07055