Obtaining a commercial loan for a commercial property has become far easier as the years have come and gone. However, stated income commercial loans have really taken off too and it’s not hard to see why; these are slightly different than an average loan and can prove very effective.
There are many businesses and business owners who want to buy commercial property, but, in order to do so, have to look at a stated income commercial loan. Read on and find out more about these loans.
What Is A Stated Income Commercial Loan?
Despite the fact SICL are very popular commercial lending options, most aren’t entirely sure what they are all about. So, what is this type of loan?
Well, a SICL is a slightly different loan. Borrowers do not need to in fact prove they will be able to repay the loan by means of their personal income streams, but rather by the rental potential from the property. This might sound quite strange but that is why these loans are very popular. A lot of lending streams now offer these loans as commercial property can offer some amazing value for owners. Usually, if the commercial rental figures are good, the loan companies are satisfied they’ll receive their money.
Why Choose SICL?
These types of loan are very impressive indeed simply because they do not require a lot of documentation. Now, as most will know, obtaining a loan covers a lot of paperwork and that can be extremely frustrating. However, with the stated income commercial loans you can actually find there are very little documents required. Since you’re getting a loan to the property’s cash flow there is no real need to have a lot of documents.
This is why a stated income commercial loan has proven to be vastly popular. Also, approval rates are far more impressive than say with a standard loan so that is another important factor to remember. Being able to get approval for a loan is often hard but with these loans, it’s a little easier.get more details from http://www.businesswire.com/news/home/20161208005132/en/Apollo-Commercial-Real-Estate-Finance-Closes-Mortgage
Why Are Stated Income Commercial Loans So Important?
Obtaining commercial property is hard. There is not only a big down payment to be made, but substantial costs attached and it can be very costly indeed. There are not many lenders who are going to allow a newcomer to borrow such a high amount in today’s market. Commercial lending is good in one wa, but traditional methods are very tough on newcomers which is why stated income loans are popular. A holding company can in fact have their name on the loan and not the borrower which is unique.
Strict Rules to Become Eligible
However, when it comes to eligibility there are some strict rules that follow. For instance, a commercial loan can only be given if the business has been running for two years or more or plans to occupy the business for that amount of time. The credit score also needs to be at least six hundred or above that. Any guarantor or a person who is operating the company cannot in no way have a bankruptcy against their name. If a person has been declared or filed bankrupt within the last three years, they will not be eligible for a stated income commercial loan.
Commercial Lending Is Easier To Obtain
Today, more businesses look to commercial loans and new lending streams to help them build and advance their business. These are useful as it’s hard to buy commercial property. However, it is important to state that the loans must be repaid and there may also be higher interest attached. This is very important to note, but if you’re willing to repay all monies then looking at a stated income commercial loan can be great.