Are you self-employed and trying to apply for loans? If so, you’re well aware that the bank will do everything in its power to put you through the wringer during the personal loan application process. This usually happens because we overlook preparing required additional documentation. This results in a longer application process. That’s why our firm has done extensive research to help our clients during the loan application process. Getting loans for self-employed workers may seem like an intimidating process but it doesn’t have to be if you plan ahead.
The first thing you need to know is that every bank is different. There isn’t a cookie-cutter way of getting loans for self-employed individuals that can be prepared and submitted to multiple lenders. However, we’ve come up with 10 items that are almost universal. Having these set and ready to go will save you time and ultimately help you get personal loans if you are self-employed.
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Make The Loan Process Simpler If You’re Self-Employed
10 Essentials Documents For Loan Applications
1. Federal individual tax returns for the last three years. An extension is often accepted for the most current year if your return is on extension.
2. K-1’s from partnerships or corporations in which you have an ownership interest, for the last three years.
3. Full Federal partnership or corporate tax returns for all entities in which you own > 25%, for the last three years
4. Year-to-date Profit and Loss and Balance sheet reports for all sole proprietorships as well as all partnerships and corporations for which you own >25%, for the current year.
5. List of all current business debts for sole proprietorships
6. Year-end mortgage statement for all rental properties held in partnerships, for the last three years.
7. W-2’s for the past two years
8. Pay-stubs for the last 30 days
9. Investment/Savings/Bank Statements for the last two months
10. Signed IRS Form 4506-T – Request for tax transcript
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Tips for simplifying the process for loans for self-employed individuals:
1. Don’t hesitate to contact your CPA for assistance when applying for self-employed loans. They are sure to have your records easily accessible and can offer additional tips to help you streamline your lending process. Several CPAs also have direct contacts within local branches, so they can get your questions answered quickly.
2. Many banks have their required docs listed on their websites. To name a few:
–Wells Fargo Home Buying Application Checklist
–Bank of the West Loan Application Checklist
Getting loans for self-employed individuals may require you to jump through a few more hoops during the application process in comparison to W-2 employees. However, you can prepare by having these 10 documents on hand. In the end, the turn-around should be much shorter.
Have you been asked for any other documents that should be on this list?
By: Sarah Moore, Manager at WHH
