Lenders verifying income for a small business?
Mar.11, 2009 in
Uncategorized
icehawk40 asked:
What ways can lenders verify a small business income with out 1099 forms. Do they just use tax returns and a financial statement or can they compare reported income to what the IRS has on file without your consent. The reason I am asking is I applied for a loan for my business and gave them tax returns that were not accurate. My wife has been using our turbotax program trying learn how to use it. She changed figures in the last 2 years returns while playing with the program. I didn’t know it and printed them off and gave them to the bank. The bank has already started the paper work and I can’t get them back now.
What ways can lenders verify a small business income with out 1099 forms. Do they just use tax returns and a financial statement or can they compare reported income to what the IRS has on file without your consent. The reason I am asking is I applied for a loan for my business and gave them tax returns that were not accurate. My wife has been using our turbotax program trying learn how to use it. She changed figures in the last 2 years returns while playing with the program. I didn’t know it and printed them off and gave them to the bank. The bank has already started the paper work and I can’t get them back now.
What should I do? Can I get into legal trouble? Can they even verify the tax returns with what the IRS has on file if I havent signed the 4056 form (not sure if thats the right form number)?
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invoice factoring
March 12th, 2009 at 3:14 am
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You need to nip this in the bud before it goes too far. Call the bank, explain what happened and start the process over again. I doubt that you would get in too much trouble, but it does not seem worth it either way.
In term of income verification the Tax return is pretty much it for a small business. Since you are going to have to guarentee the loan anyway, your tax records will work just as well. 1099 only tell part of the story, the return tells the whole thing.