How One Business Owner Got the Cash-Out Loan They Needed Without Tax Returns

By: Zack North

Documentation concerns are a major issue for borrowers in need of commercial mortgage financing.Tax returns are a particular source of worry.  That’s because small business owners often struggle to produce returns that accurately prove their current income level. The problem is that many traditional lenders require this type of documentation when determining whether to approve or deny a loan request.  If you are unwilling or unable to produce tax returns for their review, you simply won’t get approved.

So — is it possible to get a loan without having to provide tax return documentation?

Read through the following Commercial Direct success story to find out!

A cash-out request in Liberty Hill, Texas

The owner of an automotive property in Texas needed funding to complete several property improvement projects.  The owner also needed to pay off cash advances.

The owner’s strategy was to tap into the owner’s equity in the property that had built up over time through a cash-out refinance.

The problem?  This business owner did not want to provide the tax return documentation banks required.

As a result, traditional lending options had to be discarded in favor of more alternative solutions.

Qualifying through bank statements instead of tax returns

Since tax return issues are so common in today’s market, we at Commercial Direct have introduced a bank statement option for business owners in need of a commercial mortgage loan.

It’s simple – instead of producing tax return documentation, prospective borrowers can give us 12 consecutive months of their business bank statements.

For many business owners, bank statements reveal a clearer, more up-to-date view of their business’ success.  And this type of documentation can be easier to produce as well.

How does the process work?

Bear with us as we go into a little more detail to describe the underwriting process.

To see whether a prospective borrower is able repay a loan, our team of underwriters reviews 12 consecutive months of the borrower’s business bank statements to determine the gross revenue of the borrower’s business.

They then apply an expense factor to determine the net cash flow from the borrower’s business that is available to cover the borrower’s business, personal, and property obligations, as well as the debt service coverage for the requested loan.

What happened with the business owner in Texas?

After learning about Commercial Direct’s bank statement solution, the business owner in Liberty Hill decided to move forward and apply for a loan.

It turned out to be a smart decision.  After reviewing the bank statements, as well as additional credit and property information, the team at Commercial Direct approved the $1,715,000 loan request and made it possible for the business owner to get the cash the business owner needed.

Want to see if this solution works for you?

If you are a business owner in need of commercial mortgage financing and you’re currently experiencing tax return issues, our bank statement solution might be the perfect fit for you.

Tell us about your loan request today and one of our commercial loan experts will reach out to discuss your opportunities for success.

Author: Zack North

Zack North is the Director of Marketing for Commercial Direct.  As a regular contributor to a number of top industry publications, Zack enjoys writing about topics that help investors and business owners approach commercial mortgage financing with confidence.

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