Avatar's Blog

» Closing Documents - Form 4506

Posted on 6/10/2005
Form 4506 is an IRS form that gives permission for a third party to request and receive a copy of your past tax returns. While Avatrar Financial Group does not lend money based solely on the information in your prior tax returns, review of those returns is part of the due diligence process. Tax returns help to validate financial information provided in Profit and Loss statements before the Letter of Intent was issued. Many borrowers worry that their tax returns will not provide a full picture of income and will negatively impact their loan package. In truth, hard money lenders are financially savvy people who understand how these varying financial documents, which serve different purposes, meld to form a more complete picture of income, cash flow, tax payments, etc. A wise business person does not pay more tax than is due. Hard money lenders know that.
Posted in Miscellaneous