If you filed an extension, Corporate and Partnership federal tax returns are due September 15th. Community Business Finance wants to remind you about the importance of completing your tax returns on time and how your returns can affect your ability to get the business financing you need.
The most successful businesses in America are the ones that accurately report their income and faithfully pay their taxes. In fact, accuracy is crucial to the success of a business. It is also crucial when securing a business loan, such as Community Business Finance's 504 Loan Program.
Lenders use accurate tax information to determine many aspects of your loan terms. It is a key piece of information that gives lenders a wealth of insight into the health of your business.
- Tax returns verify your income
Perhaps most importantly, lenders use your tax returns to verify your income. Lenders use the income declared on your returns to determine the amount of money they are willing to loan you, as well as to assess your ability to repay the loan.
- Tax returns determine your level of risk
Your reported income is also used to determine your debt-to-income ratio, which is simply the percentage of your monthly gross income that is used to pay your monthly debts. The higher your debt-to-income ratio, the higher the lender’s risk, and lenders are always concerned with risk.
- Tax returns reveal your character
Character is defined as the mental and moral qualities distinctive to an individual. It is perhaps the most important of all the qualities in the 5 Cs of Credit. Banks want to loan money to people with good credentials and references, but they also consider how you take responsibility. If you have not fulfilled your obligation to file your business income taxes, this negatively impacts your character for both lenders and the SBA. The SBA will not approve a loan application if you have not filed your taxes properly.
Providing accurate tax returns is essential to getting the business financing you need, with terms that work best for you.
Ready to get started? Fill out a short form on our website at Get Started and a loan officer will contact you.
For more information on Community Business Finance’s 504 Loan Program visit our 504 School, or contact our offices:
In Texas call Bill Ebersole at 713-457-1650, ext. 201, or email him at firstname.lastname@example.org.
In Louisiana, call Jeanne Bergeron at 1-800-462-1017 or email her at email@example.com.