Your tax return is your loan application. Lenders check it with the IRS.
By the AceTheSBA team
Your financial statements tell a lender what you earned. Your tax return proves it. SBA lenders verify returns directly with the IRS using Form 4506-C, so the numbers you file are the numbers your loan will be judged on.
Three things to know
- Unfiled returns stop an application. An applicant that has not filed required federal returns is not eligible.
- Taxes owed are a question, not always a stop. They are usually acceptable only if you are on a formal payment plan and current on it.
- The latest filed year is what counts. For a business purchase, coverage is measured on the last fiscal year or the average of the last two. A stronger year helps only once it is on a filed return.
The deadlines
For calendar-year businesses, partnership and S corporation returns are due on March 15, and C corporation and individual returns on April 15. If last year was your strongest, filing early puts it in front of a lender sooner.
The lender’s view
A lender compares your financial statements, your tax returns and your bank statements. When all three agree, the file moves. When your books show one profit and your return shows another, the underwriter stops and asks why, and the answer has to be documented.
Your move this week
Where do you stand?
The SBA Readiness Report checks your tax filings and financial records the way a lender would, flags anything that would stop an application and gives you a 90-day plan. Six minutes, $19.99.
This week’s tool
Profit and loss, balance sheet and interim statements in the format lenders expect.
$19.00