Do you need a business tax extension loan to pay taxes by the October 15th, 2020 deadline and haven’t come up with the funds? The tax deadline is next week!
Leverage the assets or cash flow of your business to pay the amount due by October 15th, 2020. Several unique programs available, below now!
Need the money to pay the IRS October 15th deadline? Get your business tax extension loan now!
Several relatively unknown programs available. Due to this year’s July 15th, 2020 regular filing date, the extension period is reduced from 6 to only 3 months. The October 15th, 2020 deadline has not been extended.
1. Funding against the equipment your business owns.
Businesses that have construction equipment or over the road tractor trailers can use their equipment to pay tax extensions.
You can get between 40% and 60% of the retail value of the equipment, depending on the year, make, model & condition.
Example: Your business owns a 2010 John Deer Front End Loader with a retail value of $60,000. Based on a 40% Loan to Value, the offer would be $24,000. The percentage will depend on the condition of the asset, maintenance records and the results of a site inspection.
A 60% valuation would give an offer of $36,000. These ranges may vary from lender to lender. The difference is that most lenders will not make this type of loan at all and it is also considered a specialty business loan.
Traditional banks will rarely make this type of loan. When they do, they typically only offer approximately 10% – 20% of the value of the equipment and require real estate as part of the loan.
Therefore, if your business has to have money to pay the IRS extension amount and gets any offer close to that range, it should be strongly considered.
2. Funding against business property.
When the IRS amount your business has to pay is high, then you may need to use business real estate.
The real estate will need to have at least 50% equity in order to have a chance to get the amount you need. A 50% equity requirement seems like a high number. Most lenders do not loan against 100% of the value of real estate and 65% to 85% is the maximum.
It is hard to qualify to get a loan to value higher than 70% or 75% of the appraised value.
3. Funding based on the cash flow of your business.
Another option is to fund against the cash flow of your business. This may be the best option for businesses that are asset poor.
For Example: Your business has limited assets but strong annual revenues. You need $25,000 to pay by October 15th, and business annual sales are $300,000.
Based on getting approximately 50% of monthly sales, $25,000 X .50 = $12,500. An average offer will be approximately $13K. Offers in this example could range from $10K to $30K depending upon other factors.
FAQ Business tax extension loan
Can I get a loan to pay business taxes by October 15th ?
There are several programs your business can choose from to pay
October 15th, 2020 business taxes. Consider programs based on your company assets or cash flow.
What if we can’t pay the full amount of the extension?
Refer to your Accountant. Typically, accountants recommend filing the return, paying as much as you can and communicating with the IRS on a payment plan.
What can we do if we don’t qualify for enough to pay for the October 15th extension?
You may qualify for more than 1 type of loan. A 2nd type of loan may allow your business to get the extra amount needed to pay the IRS extension balance.
If you need a business tax extension loan to pay October 15th, 2020 quarterly taxes quickly, look at alternative solutions.
Getting a business loan approval when the use of funds is to pay business taxes is harder to get than for other reasons. Look at less well known options mentioned above, including based on assets and cash flow.
Leverage the strengths of your business to get as many options as you can. The business loans you qualify for may not be the ones you prefer. Be open to alternatives and your business has the best chance to get money to pay the IRS or State tax extension balance!