A tax extension can delay your business loan application in a few ways. Here are a few possible scenarios:
Lack of Updated Tax Returns: If you file for a tax extension, you will have additional time to file your tax returns. However, this means that your tax returns may not be available when your lender needs them. Lenders often require tax returns as part of the loan application process, and if you have not filed your returns or if they are not up to date, your loan application may be delayed or even denied.
Uncertainty about Your Financial Situation: A tax extension can create uncertainty about your financial situation. Lenders want to see a clear and accurate picture of your financials to determine your ability to repay the loan. If your tax returns are not available, or if they are not up to date, lenders may have a harder time understanding your financial situation, which can delay the loan application process.
Delay in Obtaining Other Financial Documents: A tax extension can also delay your ability to obtain other financial documents that lenders may require as part of the loan application process. For example, lenders may require bank statements, profit and loss statements, and other financial reports. If your tax returns are not available, or if they are not up to date, you may need additional time to obtain these documents, which can delay the loan application process.
In summary, a tax extension can delay your business loan application by creating uncertainty about your financial situation and delaying the availability of required financial documents. It is important to keep this in mind if you are planning to apply for a loan and are considering filing for a tax extension.