Verifing Income

[ConfusedMuse]

So people...
How do I show my income to banks, loan officers while Iam are still recouping my loss for what it cost to put the business together. The loan people i just talked to told me that until I actually pay the IRS tax on my income for at least 2 years that I can not get a loan.
My credit is impeccable, I own outright my home, have no bills... it doesn't make sense to me... any ideas?

 

[greg334]

My 1099 is my income statement, not my tax return.

My W2 form is my income statement, not my tax return.

The tax has nothing to do with the loan other than an indication of how you pay your obligations.

 

[chefdennis]

Welcome to the would of "self employment" and owning your own business and doing so without a good cushion to begin with...

Depending on what kind of loan you are looking for and what the funds will be used for, is it a secured or unsecured loan or are you looking to just get a line of credit...what knid of business structure you have setup....there are other ways of getting funds....keep looking and contact "professional business groups" and get their advise, SCORE comes to mind a a group that can help with business info...

I think there are a few here that have use those companies that structure your business for you and get you lines of credit, of course those are services you have to pay for....

 

[ConfusedMuse]

well its not a loss... putting the business together, I just want my money back first, and the loan people are not satisfied with an income statement, or 1099, they said the new Govt rules state I must show that I pay tax over and above what it costs to live ie utilities,food, rent/mortage for 2 years. But, I've been self employed for years owned multiple properties, cars, always paid off my obligations before end of loan. The loan people understand completely and again say it is the new Government regulations, their hands are tied, In the past a loan/mortage would have been granted asap based on my status so to speak.

 

[ATeam]

So people...
How do I show my income to banks, loan officers while Iam are still recouping my loss for what it cost to put the business together. The loan people i just talked to told me that until I actually pay the IRS tax on my income for at least 2 years that I can not get a loan.
My credit is impeccable, I own outright my home, have no bills... it doesn't make sense to me... any ideas?

If your business is operating at a loss, it is a fact that you must recognize. That's what the bankers are doing. You should too. The fact that you have income does not mean you have profits.

 

[ATeam]

well its not a loss... putting the business together, I just want my money back first, and the loan people are not satisfied with an income statement, or 1099, they said the new Govt rules state I must show that I pay tax over and above what it costs to live ie utilities,food, rent/mortage for 2 years. But, I've been self employed for years owned multiple properties, cars, always paid off my obligations before end of loan. The loan people understand completely and again say it is the new Government regulations, their hands are tied, In the past a loan/mortage would have been granted asap based on my status so to speak.

Having not applied for a loan of any kind in recent years, I am not familiar with the new regulations you mention. It would seem that credit standards have tightened. Had they been tighter in the age of no doc loans (liars loans), the financial crisis and subsequent recession may not have been as severe.

 

[bobwg]

well its not a loss... putting the business together, I just want my money back first, and the loan people are not satisfied with an income statement, or 1099, they said the new Govt rules state I must show that I pay tax over and above what it costs to live ie utilities,food, rent/mortage for 2 years. But, I've been self employed for years owned multiple properties, cars, always paid off my obligations before end of loan. The loan people understand completely and again say it is the new Government regulations, their hands are tied, In the past a loan/mortage would have been granted asap based on my status so to speak.

I am confused " you want your money back"? the money they would loan you is not your money thats why it s called a loan and you have been self employed for years? so you dont have all those tax returns from filing your taxes with the IRS?

 

[greg334]

unless the regulations happened in the last month, here is what I know about a loan that was just made.

They provided the following;

1099 from the carrier and w2 statements from another job.

Proof of ownership in a home (I don't know why but the bank asked for this)

Schedule C for the past three years

Business plan

Work experience documents within this industry

company contract and documents to support their need for a loan

They qualified for a loan within two weeks, the amount they are funding purchases is about $350k, which buys five trucks and three trailers. They have been in this business for 4 years and last year declared a loss which will carry over for the next two.

The bank they deal with said that credit is not impossible to get just more justification is needed.

 

[johnf]

I use to be in the banking buise until the financial crises happened now I'm in the expediting buise and i don't regret it.what i can suggest to you is if you went to a big bank they are very strict to say the least try a credit union they are usually look at you a little bit more than just numbers.

GOOD LUCK

 

[Brisco]

I use to be in the banking buise until the financial crises happened now I'm in the expediting buise and i don't regret it.what i can suggest to you is if you went to a big bank they are very strict to say the least try a credit union they are usually look at you a little bit more than just numbers.

GOOD LUCK

Hahaha........

Maybe this is what happened to, I mean IN, the banking industry.

 

[DannyD]

I'd try a credit union. They give a lot more leeway on that kind of thing. I'm not promising it's a sure thing that you'll get a loan, but a credit union would tend to look at your paychecks, see if your bills are paid on time, etc & decide from that than a bank would.

Again, this is no promise of a loan for you. I'm just saying your odds are a lot better at a credit union than a bank.

Good luck to ya.

 

[Crazynuff]

My 1099 is my income statement, not my tax return.

My W2 form is my income statement, not my tax return.

The tax has nothing to do with the loan other than an indication of how you pay your obligations.

A 1099 is gross income and tells the banks nothing . They give loans according to your net and amounted reported as taxable income . I made the mistake of taking a "bonus " deduction the year I bought a new truck .It reduced my taxable income considerably that year but greatly reduced how much depreciation I could claim the following year .
Whenever I hear O/O's bragging the the CB bout how much they made the previous year I ask "O.K. , what did you report to the IRS for net on your tax return ? "
The radio usually goes silent .

 

[jelliott]

Did you set your company up as a corporation and loan your company the start up money? If you pay yourself, you can use your paystubs from your own company as proof of income. Sometimes you are better to pay yourself a fair but good salary and do not mention that you "own" the company that pays you.