Tax liens and judgments are automatic disqualifiers when it comes to SBA loan approval from banks and traditional lenders. Even those with incredible FICO scores, stellar sales, and many years in business get turned away fast at the mere mention of them.
So, can you get an SBA loan if you owe taxes or have a lien or judgment?
Yes! National Business Capital has come up with a solution for small business owners to quickly and easily wipe away any tax liens or judgments and get the SBA financing they need.
Can You Get an SBA Loan With a Tax Lien or Judgment?
Yes! While traditional SBA lenders don’t approve business owners with tax liens or judgments for SBA loans, alternative SBA providers, like National Business Capital, approve business owners with these issues for SBA financing every day.
We do this through our Hybridge SBA Loan Program – a new SBA financing product that banks and SBA lenders cannot provide.
The Hybridge SBA Loan is unique in being the only funding program that both removes tax liens and judgments from financial records and supplies business owners with SBA loans faster and easier than any other lender on the market.
“So You’re Saying I Should Borrow Capital…to Borrow More Capital?”
AND pay off your tax liens and judgments without breaking the bank, lower your cost of capital, speed up your time to SBA funding dramatically, and save countless time and money by utilizing the Hybridge SBA Loan process – YES!
I know what you’re thinking. It sounds like you’re borrowing more, and saving less. Bear with us, and we’ll show you why the opposite is true!
If you have a tax lien or judgment on your record, it’s most likely because you don’t have the funds to pay them off yet.
In these cases, business owners are presented with two choices: pay them off with borrowed money, or wait until their business has the cash flow to support wiping away their tax lien or judgment, without taking away from operational expenses.
Using your own capital to pay off your tax liens or judgment can cause massive cash flow interruptions, and wind up costing you enormous amounts of revenue in the process. You know this, or else you would have used your own funds already, right?
So instead of paying out of pocket, or borrowing funds you don’t need, utilize the only SBA program on the market specialized to help business owners with blemishes on their financial histories – and save time and money at the same time!
How a Tax Lien or Judgment Can Affect Your SBA Loan Application
The IRS places tax liens and judgments on assets a borrower owns if they fail to pay their taxes or work out a resolution with their agency. It’s a red mark on your credit history that shows you haven’t paid a government organization what you owe them, making it a red flag to all other government creditors.
SBA loan providers don’t want to take a financial loss on any transaction, so they’ll research each borrower comprehensively before making an official decision on their application. If they notice a tax lien or judgment, they’ll see it as a major risk – “Why would they pay me back in full when they didn’t pay back the other government organization?”
That’s not to say everyone with a tax lien or judgment is a risky borrower. Things happen, and you could find yourself under circumstances that you can’t predict. That’s why National Business Capital created our alternative solution for these borrowers, as everyone deserves fair access to essential growth capital, regardless of one event on their credit history.
Getting a loan with a tax lien is challenging but not impossible. Reach out to our team to explore your options!
How to Get SBA Approved With Tax Liens & Judgments
Can you get a business loan with a tax lien? Yes, and here’s how:
First, apply for a small business loan or business line of credit, which you will obtain in 24 hours through NBC’s expedited funding process.
Use these funds to pay off your tax lien and/or judgment.
This immediate capital injection can also be used to supply your business with the cash flow it needs for any immediate uses while you wait for your expedited SBA loan.
Apply for your SBA loan. Through NBC’s expedited SBA process that eliminates paperwork and wait times, business owners typically receive SBA funds as soon as 45 days after applying.
Use your SBA funds to pay off your initial small business loan.
Now that your initial capital injection helped you pay for any short-term goals and challenges that needed immediate attention, your SBA loan will help you with long-term funding.
Using your SBA loan to pay off your initial small business loan ensures that you no longer have to pay off the initial capital left over out of your own pocket.
What’s more, doing so ensures that you borrow only as much SBA funds as you need, lowering your cost of capital long term.
Many business owners apply for SBA loans without considering the possibility of borrowing ‘too much.’ This can leave business owners paying off funds they didn’t need to borrow well into the future.
How Do You Qualify for SBA Loans With Tax Lien or Judgments?
Before you can start using your funds, you need to qualify. Here’s what NBC requires for SBA approval:
- 2+ Years in Business
- Make at Least $120K in Annual Gross Sales
- Have a FICO Score of at Least 685
If your business meets all these requirements, then all you have to do is apply online by filling out this 1-minute application.
Or, you can call (877) 482-3008 for more information and to ask how we can start helping you remove your tax liens and judgments necessary to get your expedited SBA loan.
How to Apply for SBA Loans With Tax Liens and Judgments
If you have a tax lien or judgment on your record, it’s best to disclose that information to your SBA provider before submitting your application. The SBA underwriting process is notoriously long, so it’s best for every borrower to ensure that everything on their application won’t disqualify them from the process immediately.
If you choose to work with National to get around the tax lien or judgment and reach an approval, here’s what to expect from the process.
- Apply Securely Within Minutes
Move through our streamlined application within minutes and upload your business documents with zero risk.
- Speak With Our Team and Review Your Offers
Next, you’ll speak with our Business Finance Advisors about your business, circumstances, and your goals. We’ll find a solution, then you’ll compare your offers with expert advice from our team and select the best one for your situation.
- Get Funded
With your money in hand, you can take advantage of opportunities and tackle challenges with confidence.
What if Your Business Doesn’t Qualify for an SBA Loan?
Sometimes, financial circumstances or short operating histories bar business owners from getting SBA loans, even through alternative lenders with more lenient qualification requirements. However, that doesn’t mean you’re out of luck if your business isn’t approved. Other funding options can make it possible to pay off your debts, get back on your feet and start working toward business growth.
National Business Capital offers several loan programs for which you may be able to qualify regardless of credit score or current debt, including:
- Accounts receivable financing
- Business line of credit
- Equipment financing
- Merchant cash advance
- Short-term business loans
A business financing advisor can help you choose the best option for your business based on your needs, financial standing, and the types of expenses you’re looking to cover.
Taking out a different type of loan can increase your chances of qualifying for an SBA loan in the future. How? Making payments on time improves your credit score, and using the money from the loan to pay off debts and invest strategically in your business gives you a stronger financial picture to show to lenders. Funding also helps you avoid more serious problems, such as defaulting on current debts and having your assets seized because you can’t meet payment obligations.
As you consider an alternative option, be mindful of terms and rates. Financial trouble can make it more difficult to qualify for low-cost funding, but the team at National will work to find the most favorable loan structure for your business.