A sicl is a commercial loan that does not require the full documentation that is required of a full document commercial loan. This type of commercial loan does not require the borrower to be able to prove that they can afford to make the loan payments from their own personal income but instead relies on the rents of the commercial property or the possible rents for the property.
Financial Benefits of a stated income commercial Loan include:
* Less Documentation The stated income commercial loan requires less documentation than a tradional commercial loan. In many cases since the loan is only underwritten to the properties cash flow or potential cash flow it is not necessary to provide as much documention.
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* Easier approval process This commercial loan has an easier approval process because it does not have to be underwritten to both the property cash flow and a secondary repayment source such as the borrowers personal income.
secondary repayment source such as the borrowers personal income. Lower credit score requirements Some of these commercial loan programs also have reduced credit requirements.
Examples of a typical stated income commercial loan borrower include:
* A self employed small business owner that does not report all of their income on their tax returns who is looking to purchase a commercial property using a commercial loan.
* A real estate investor that does not show the amount of income necessary to qualify for a traditional commercial bank loan but the property has rental income that will support the debt payments.
Purpose
A stated income commercial loan is designed to help a borrower purchase real estate that they would otherwise be unable to purchase without a significant down payment. The commercial property does not have to be held in the name of the borrower or the operating company but can be held in the name of a holding company.
There are certain criteria for eligibility of this type of commercial loan.
The business that is occupying the property must be in business at least 2 years.
The guarantors credit score must be 600 or above.
The guarantor and operating company can not have a bankruptcy that is more recent than 3 years.
Structure
This commercial loan is only done on a first trust basis although it is possible to have a second trust provided by someone else. There are instances where combined total financing can be close to 100%. This depends on the type of commercial property, credit of the guarantor and other underwriting factors. Closing costs can be financed into the loan under most circumstances.
Easier than you think!
The stated income commercial loan is really meant to help people qualify for a loan without the hassle of providing the full documentation needed on a traditional bank loan.
Rates are slightly higher.
The interest rates are slightly higher for this type of commercial loan but the loans can be amortized up to 30 years.
The stated income commercial loan closes quickly in most cases.
It usually takes about 30 to 45 days from start to finish to close this commercial loan.
Borrowers do not have to use their house as collateral.
It is very rare that a stated income loan will need to use the borrowers home as collateral.
Borrowers with less than perfect credit can qualify.
Borrowers with credit scores as low as 600 can qualify for these programs. If your credit is within 40 points of this number it is possible that you may have some mistakes on your credit that we can help you fix while closing your loan. So even if your credit does not meet the 600 number today, it may when we are done with your loan.
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