Stated Income Loans: A Realistic Option For Commercial Properties?
For commercial real estate investors and property developers, securing financing for property transactions can be challenging. Traditional bank loans often get held up by red tape, which can cause time-sensitive business opportunities to be missed. Additionally, the high access requirements for traditional loans frequently leaves commercial real estate investors with very few, if any, options available for financing. However, more people are turning to stated income loans as a much faster source of financing, with easier requirements to meet.
Traditional Lenders Require A Regular Paycheck
Even if a commercial real estate investor meets all of the credit and background points for a traditional loan, there is one requirement which, if not met, can cause a denial of funding. Banks and similar lending institutions require proof of salary, as in drawing a regular paycheck from an employer. This is usually bad news for commercial real estate investors. Frequently CRE investors and property developers generate revenue from rental units or by selling properties. Rent from tenants is not considered drawing a regular salary, and selling commercial properties rarely occurs a regular intervals. So even if a CRE investor is generating millions of dollars from rentals or sales, traditional lenders will still not approve financing.
How Do Stated Income Loans Work?
Stated income loans have much easier requirements for commercial real estate investors and property developers. Instead of requiring proof of salary or a regular paycheck, stated income loans require, as the name implies, a statement of income. This is not to say that someone claiming a lot of revenue is automatically approved for stated income loans. The statement of income needs to be backed up by bank statements and the most recent tax filings. Stated income loans offer independent commercial real estate investors and developers the ability to sidestep the bureaucracy of traditional lenders, and get the funding they need quickly. Stated income loans can also be customized to fit the property transaction at hand, instead of having to to apply for “cookie cutter” loans from banks and similar institutions.
Learn More About Stated Income Loans
At BG Capital Funding Group, we handle commercial real estate transactions ranging from first-time house flippers and multifamily rental properties, on up to large construction projects. Contact our offices today to learn how stated income loans can help you reach your goals, and keep your commercial real estate projects on track.