Tax planning and lending goals can sometimes pull in different directions. Aggressively minimizing taxable income may reduce the profit shown to a lender.
Why profitability matters
Many lenders use tax returns to evaluate historical earnings and debt-service capacity.
Coordinate planning
Business owners should discuss future borrowing goals with qualified tax and financial professionals before making year-end decisions.
Bottom line
Tax savings today can affect borrowing capacity tomorrow, so planning should consider both objectives.
Educational information only. Financing and approval criteria vary by funder, product, industry, and applicant. Nothing on this page guarantees approval, terms, or a specific funding amount. Consult appropriate financial, tax, legal, and insurance professionals for advice specific to your business.