What entity Information (If Borrowing Through an LLC) needed on a DSCR Application?

[Robin Simon]

🤔What entity Information (i.e. If Borrowing Through an LLC or Trust) needed on a DSCR Loan Application
👨‍🏫Since most DSCR Loans have borrowers that are entities such as LLCs, most DSCR Loan applications will have a separate section for entity details if it’s applicable. While all of the entity docs will be collected later on and information verified and checked, the crucial reason for entity information at the application stage is the names and ownership percentages of each individual owner of the entity since this will determine who is required to be a guarantor on the loan. Requirements can vary among lenders for what the ownership threshold of an entity is to require a personal guaranty (typically around 25%). But this is the stage of the process where the credit reports are run, so understanding the ownership splits and for whom the lender needs to get credit authorization and credit reports is determined from this section.
➡️ Entity name and address
➡️ Tax ID and state of registration
➡️ Entity type (LLC, corporation, partnership, or trust)
➡️ Names and ownership percentages of individuals who own portions of the entity

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