Tax Return Underwriting
An underwriting approach that evaluates a business primarily using its filed business and sometimes personal tax returns, rather than bank statements alone.
Tax returns give a lender a verified, IRS-reported view of revenue and profitability, which many traditional bank and SBA lenders weigh more heavily than self-reported financials or even bank statements alone.
Because tax returns are filed annually, this approach can be slower to reflect very recent business changes than bank statement underwriting, which is part of why some alternative lenders favor the latter for a faster decision.
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