I have a client with a big sign in his office that says “Bankers Stink”. For anyone who is self-employed and has tried to qualify for a bank loan, while using the tax system as it is designed for the self-employed, you know the frustration of fitting inside a banker’s box for qualifications.
Know that your employees, who you provide the paycheck for, will have an easier time qualifying for a loan than you will.
The truth is most bankers are W2 wage earners who do not know business at all. They struggle to read a profit and loss statements and a balance sheets, well let’s just say it’s rare to find a banker that can really read one. Try throwing multiple entities in the mix and then wheeee, you will spin a bankers head completely around.
Unfortunately, most bankers really have no desire to be educated in this area. They are salesmen selling a banking product and if they can’t check off all the boxes just so they are unable to think outside those boxes. If you find a banker who actually understands business hang on to them, they are rare!
While you may have to shop around, you will have better luck with a Mortgage Broker.
Mortgage Brokers actually own their company and as such understand business more. A good one will be able to look at your reports and help find the best solution for you. They don’t actually hold your mortgage, so understand you are not developing a banking relationship with them, they are simply brokering your transaction in the market place.
So what’s the solution?
It really comes down to what you want and then finding the right fit.
If you want to qualify for a typical bank loan, then you will want to have a W2 paycheck from your company and pay taxes on some profit. The size of the loan will dictate the amounts you want to show.
If you want some help running the numbers let us know, we are here to help.