Covid wiped out many small self-employed business owners.

Once you’ve been successfully working for yourself, most entrepreneurs don’t want to go back to the “8-5”, fight traffic every morning/evening,  “drink the corporate kool-aid,” or answer to corporate clowns whose only agenda is to benefit themselves.

The rate is pricey, but so is paying the California state income tax of 13.3% (with current legislation pushing the rate to.16.8%). The Federal tax rate is between 10% and 37%). The social security/Medicare tax rate is 7.5%

Get the Lowest Interest Rate, Fees, and Fastest Service

YouTube – Straight Talk Lending – Daniel Dobbs

“Catch my drift”; Net tax” payments can be reduced substantially with self-employed deductions, which are more numerous when compared to salaried/ hourly employment.

​Closing Cost Credits Explained

Points and mortgage payments CAN be tax deductible-consult your CPA for more info.

These Factors Determine a Borrowers Interest Rates

Now, with the economy on the mend, many entrepreneurs are seeking to
expand their current business, re-start a former business or begin another.

But; How will they get seed money showing little or no taxable income?

HELOCs from banks and credit unions are “full doc,” so that’s to be an option, nor is refinancing their current home, as many homeowners currently have a 1st TD under 4%.

Stated Income Second Trust Deed
There is an alternative; a stated income second trust deed.

This is a niche loan product for current homeowners wishing to start or expand their current business and requires only minimal documentation with NO TAX returns.

Cash Out-2nd TDs

1) The loan proceeds can also be used for any business or to buy an investment property.

2) Rate: 9.99 – 13.99% depending on the CLTV, FICO, and current condition. Add to rate for borrowers with less than a 640 FICO score.

3) Max CLTV: 65% with a full appraisal.

4) Term: Fixed for two years, with 6-month prepay.

5) Payment options: “Interest Only” for 30-year amortization OR a 40- year amortization; the loan is fixed for three years, with a 6-month pre-pay.

6) Minimum Loan Amount: $100,000. The max. loan amount is typically $160k, but exceptions can be made-call for more details.

7) Proceeds: must be for either a current business, to begin a new business, or to buy an investment property. A letter of purpose must be submitted with an application.

8) A homeowner’s current 1st TD must have at least five years remaining, and the rate cannot be higher than 7.5% on the 1st  TD.

9) Fees and pts: $1,775 processing and funding fee + 4 points up to
$160,000.For larger loan amounts, call for a more precise quote as points decline for higher loan amounts,

10) Proof of self-employment: Business or professional licenses  A business license can be as recent as one week old.