Tax Verification for SBA Financing

In a complete change of ownership, tax verification of the seller’s business tax returns is a requirement per SBA. If the seller has filed under sole proprietorship, then it is required to verify their Schedule C.

There are cases where the tax verification is not satisfied where the tax transcripts do not match the tax returns provided. In this case, many lenders will want this to be completed so that both matches. However, there are ways to satisfy this requirement per SBA's policies and procedures.

For example, when acquiring a business, you may use the sales tax payment records to satisfy this requirement. This is typically used in a case where a business is owned under a corporate entity that has multiple businesses at different locations. SBA would accept this form of verification.

All this information can be found in the SBA SOP 50 10 6 which came out on October 1, 2020.

Team members at Blue Water Capital Advisors have significant knowledge of SBA’s policies and are always up-to-date with any changes. If you have questions regarding any SBA eligibility topics, feel free to reach out to us. Don’t forget to subscribe to our newsletter.