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Business Income

Established Member

Business Income

I was wondering about the different types of business income questions on card or loan applications.

I guess most of them ask for total revenue, which in my relative's case would be nearly $1million a year. But on her personal tax return she has a loss of $40k from the business (not counting her salary that is paid from her business).

On others I think they may ask for Business Income (I think i have seen that on a CLI request).

 

Do some of these banks ever ask for corporate taxes, like a 1120s? What about if you were an LLC or sole prop, how would they verify Revenue/Sales?

Or do they usually ask for a personal return where your business revenue would likely not show up....?

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Senior Contributor

Re: Business Income


KillerCut wrote:

I was wondering about the different types of business income questions on card or loan applications.

I guess most of them ask for total revenue, which in my relative's case would be nearly $1million a year. But on her personal tax return she has a loss of $40k from the business (not counting her salary that is paid from her business).

On others I think they may ask for Business Income (I think i have seen that on a CLI request).

 

Do some of these banks ever ask for corporate taxes, like a 1120s? What about if you were an LLC or sole prop, how would they verify Revenue/Sales?

Or do they usually ask for a personal return where your business revenue would likely not show up....?


I work at a CPA firm (I'm not an accountant), & tons of our clients have been refinancing or getting new loans this year.  We've had to give them both personal & business returns, & in some cases, financial statements as well.

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Message 2 of 3
Regular Contributor

Re: Business Income

KillerCut,

 

I can speak more for business loans than I can for business CCs so take that for what it is.

 

For straight business loans from your local bank, you are looking at showing 2 years worth of financial history on both the business and the individual owners, meaning 2 years worth of tax returns for each plus your YTD interim P&L and Balance Sheet.

 

If you are looking at business equipment leases, the qualifications are much easier. For anything below $150,000, you typically only need to fill out a credit application and show 3 months of business bank statements. Your rate will be based on "application-only" programs under this approach that are typically 2-3 percentage points higher than "full financial" transactions that the national banks typically require. The benefit here is that if your financials don't look that great but your monthly bank deposits are healthy, then application-only is the way to go.


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