Avatar's Blog
» About Stated Income Loans
'Stated income loan' is a term used in the lending industry to describe a loan requested by a borrower who cannot prove their income to the lender. By its very nature, this is a very high risk loan for the lender. In general, the more kinds of proof a borrower can offer to back up his/her claim of income, the lower the interest rates and points the loan they will be offered, and the more likely it is that they will offered a loan at all.
Develop a P&L for your business and a personal net worth (1003) form. Gather contracts, receipts, etc. to prove your income and assets. In the absence of tax returns, you will need to rely on these documents to prove that you are able to pay the loan you are requesting in a timely manner - and that is the key concern of the lender. Hard money lenders do not want to end up with a non-performing loan. At Avatar, we lend when the loan makes sense for Avatar and the loan makes sense for the borrower.
