Business purpose loans are used to finance investment properties held under an LLC or business entity. These loans are typically evaluated based on the property’s income potential rather than the borrower’s personal income. Below is a comprehensive list of required documents:

Personal Documentation:

1. Government-issued photo ID (e.g., driver’s license or passport).
2. Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).
3. Personal credit report authorization (even though credit may not be the primary factor). (If applicable)

Business Documentation:

1. Articles of Organization or Incorporation for the LLC or corporation.
2. EIN (Employer Identification Number) confirmation letter from the IRS.
3. Operating Agreement (if applicable).
4. Certificate of Good Standing (to verify the business is active and compliant with state regulations).
5. Business bank statements (last 3–6 months to demonstrate cash flow). (If applicable) – New LLC does not need this if it is the first rental home.
6. Business tax returns (if applicable).

Property Documentation:

1. Purchase agreement or sales contract for the property being financed.
2. Property appraisal report (completed by a lender-approved appraiser).
3. Rent roll (for tenant-occupied or income-producing properties).
4. Lease agreements for all rental units (if applicable).
5. Title insurance policy (to verify ownership and property history).
6. Property inspection report (if required by the lender).

Financial Documentation:

1. Debt Service Coverage Ratio (DSCR) analysis (calculated by the lender or borrower).
2. Proof of income from the property (e.g., rental income statements, leases, or bank statements showing deposits).
3. Recent mortgage statement (if refinancing an existing property).
4. Reserves documentation (proof of liquid assets to cover 3–12 months of mortgage payments, depending on the lender).

Additional Requirements:

1. Hazard insurance policy for the property.
2. Flood insurance (if the property is in a flood zone).
3. Exit strategy documentation (if required for short-term business loans or bridge loans).
4. Explanation of use for loan funds (e.g., property acquisition, renovation, or refinancing).