No tax returns
One of the major reasons why bank statement loans are are so popular is because tax returns are not required. Traditional financing options required individuals to submit a comprehensive tax return report which often disqualified many self-employed individuals.
It was discovered that tax returns do not necessarily reflect your true income. Self-employed persons can take advantage of the tax deductions, hence reducing their taxable income and Uncle Sam does not have to empty their pockets during tax time.
Self-employment is a qualification for a bank statement loan. You are earning over 25% of your income from self-employment, rental income, bonus, and commission. Basically, one who qualifies for a bank statement loan is:
- One who derives at least 25% of their primary income from a business in which they hold a controlling interest
- Derives their primary income from commissions, interests, consultation fees, gratuities, capital gains, or real estate rents
- As well as, relies on investments for income such as dividends, real estate, interest, or capital gains
Why bank statement loans?
Apart from providing flexible loans, these types of loans also have lower rates than many other cash advance programs. Depending on your lender, the loans offer self-employed borrowers affordable rates allowing them to concentrate on their business instead of paying off mortgages.
Business statement loans aid in building personal and business credit, especially amongst lenders. By repaying your loan in good time, you continue to qualify for more bank statement loans and your credit limit continues to grow.
Businesses with a steady revenue stream deserve financial assistance to aid them in their growth. These types of loans can give the applicants up to $2 million. Depending on the deposits they make into their account.
Therefore, it is crucial that you carefully manage both your business and personal bank accounts if you would like to qualify for a loan on a bank statement. Comment down below any questions or information on bank statement loans, and receive feedback from one of our professionals.