to Self-employed: share business info get a loan?

[lawncuttinfoo]

Do you think a bank has the right to any and all of your business info to verify your self employment?

Even so much as your customer list? This seems a bit unethical to give the bank your customers information which they trusted you with.

[grandview (2006)]

Tell us more,please.

[lawncuttinfoo]

It's just a question.
Do you think it is ethical to give your customers personal information to a bank to get a personal loan for yourself?

[grandview (2006)]

You shouldn't have to,they should only need to know your gross or projected.

[lawncuttinfoo]

You shouldn't have to,they should only need to know your gross or projected.

Regardless if you should have to, would you?

[JB1]

they have no business knowing that but they have the money and you want the money, their rules.

[grandview (2006)]

I didn't see the one part. Are you using your business to get a personal loan?

[lawncuttinfoo]

I am not 'using' it. The bank is verifying employment, I happen to be self empolyed.

Personally I am shocked to hear this request from the bank.

I guess I should not be so surprised I'm sure sears/target/home depot are giving out our info all the time.

[PROCUT1]

The bank can ask for whatever they want. Its their money. Well "taxpayers" money...lol But thats a different topic.

[ted putnam]

The bank can ask for whatever they want. Its their money. Well "taxpayers" money...lol But thats a different topic.

You hit the nail on the head...well...kinda. He's a taxpayer. The only thing they need to have to verify self-employment is a copy of his last years tax return. They're going to ask for that anyway so they can figure his debt to income ratio to determine whether he is a viable credit risk. There shouldn't be anything else they need (to determine self employment) unless he's just become self employed in the last few weeks or something. If that's the case you may have to wait and you probably should have tried to get the loan before becoming self-employed. To answer your question of whether I would give my customer list out to them. The answer is NO. If they ask for it you need to deal with another bank. JMO

[topsites]

Why, don't you have the previous 5-8 years' tax returns?

Anything less than that I can imagine they might get a little funny
and it might seem out of line asking for your customer list but think
how you would feel if some Joe came up to you asking for money LOL

[PROCUT1]

When I went for a business loan, I had to submit so much paperwork and information you would have thought I was buying the empire state building.

Copies of contracts, full financial statements, bank statements, asset valuations, resumes of key employees, sales reports and on and on.

[HOOLIE]

Unless they're asking for SS numbers, why the hell would you or your customers care?

[J&R Landscaping]

Just curious... What bank are you dealing with?

[mommacutz]

Is this a loan for the business or a personal loan such as for a home or auto?

[ted putnam]

Unless they're asking for SS numbers, why the hell would you or your customers care?

I wouldn't want my personal info "shared". I get enough BS telemarketing calls and "File 13" crap in the mail and a lot of it is because I've had to enter info to order something on the net and they have shared my info....pisses me off!

[willretire@40]

If you write yourself a paycheck every week and take out taxes you wouldnt even have to tell them that you are self employed. You would just say I work for AZ Lawn Care and show them pay stubs. That is if it is a personal loan.

[JRSlawn]

How much money are you trying to barrow?

[Mrs. H]

If the loan is for business purposes it may be in the bank's interest to know how many customers you have now and how many you have in the future.

It would probably make more sense to go online and find a template for an existing small business plan. Your business plan should cover all your percentages and demographics, future growth ect. without having to disclose specific customer info. It's a lot of work, but certainly would show you have a more professional approach and are serious about expanding your business.

[MarcSmith]

Bank has to verify employment. they can this with tax records and such. if you are new business and you don't have previous tax records, then you may have to show more information. If you are a company that does not use contracts for your services, then you may have to divulge a customer list such that the bank can verify your claims of income. If you have signed contracts then providing them with copies of he contracts with the first/last name blacked out might suffice. if they s till insist on a a full list, then I'd ask them to sign a form that state they will not use this list for the purposes of soliciting new customers, only for loan verification.

Look at it from the banks shoes...they have to be able to verify that you are able to pay back the loan...with no tax records, the next best hing is a customer database. with records of recent recurring deposits...

[lawncuttinfoo]

It is for a home loan.

They ended up backing off when I said I have a privacy policy with my customers and I would need to get written confirmation from each one who will be shared.

Instead they asked for copies of the deposit slips showing that my deposits were made up of a bunch of smaller checks. I guess they were concerned that I was getting a gift.

[MarcSmith]

I guess they were concerned that I was getting a gift.You nailed it....

[White Gardens]

Home loans and business loans are harder to come buy, and they want way more info about your employment then they ever have in the past.

I was checking into a business loan, and the loan officer wanted some financial info such as you are speaking about. He stated that there are too many other so-called business owners out there who are trying to say they have a business when they really have a hobby.

Banks have really cracked down on loans, though it be their own fault for giving out bad loans in the past and hurting the legitimate ones who now don't have a chance from all the new strict loan policies.

[mommacutz]

It is for a home loan.

They ended up backing off when I said I have a privacy policy with my customers and I would need to get written confirmation from each one who will be shared.

Instead they asked for copies of the deposit slips showing that my deposits were made up of a bunch of smaller checks. I guess they were concerned that I was getting a gift.

That's odd. I'm a Realtor and have closed many customers that are self employed. There weren't any in the lawn care field but self employed. I have recently done a hairstylist on booth rental and she just had to show her taxes from the past 3 years (it was a bond loan). The banks are verifying them these days through the IRS.They take a average of the previous 2 years in order to obtain salary for qualifying. All was well with the income and credit so she was able to recieve her loan.

May I ask which bank is this?

May I ask what bank?

[PROCUT1]

Its all up to the bank.

Your credit score has the most to do with it.

The lower your score, the more supporting information they are going to ask for.

[DoetschOutdoor]

Its kinda weird that they would accept deposit slips..I could be depositing 10k/week and having 9500/week in expenses, how do deposit slips show anything? Glad to hear you got it worked out though.

[White Gardens]

Its kinda weird that they would accept deposit slips..I could be depositing 10k/week and having 9500/week in expenses, how do deposit slips show anything? Glad to hear you got it worked out though.

It shows that you are actually making the money that you have reported on your taxes rather than cooking the books.

[ted putnam]

It shows that you are actually making the money that you have reported on your taxes rather than cooking the books.

It also shows cash flow which can be tapped into by them if the shrimp hits the fan.

I have been asked for a current list of my accounts receivables a few years back when I first started. My loan officer merely glanced at it, made note of the figure at the bottom and handed it back. They've never asked for one since then and I've had several "ventures" between then and now.

[White Gardens]

It also shows cash flow which can be tapped into by them if the shrimp hits the fan.



I like that quote. Can I use it. :laugh:

[MarkintheGarden]

If you wanted a loan from me, I would ask as much and more.
If I wanted a loan, I would be open to full disclosure, provided the info be used solely for the purpose intended.

[MSS Mow]

If you wanted a loan from me, I would ask as much and more.
If I wanted a loan, I would be open to full disclosure, provided the info be used solely for the purpose intended.

This is the concern. I have seen first hand banks using the "customer lists" for their own personal benefit, or the benefit of a family member or friend in the same business. On a similar note, also seen business plans turned down by banks only to have the very same business opened by bank bigwigs or family/friends. This, after the person applying for the loan was told the idea wouldn't work in our small community, AND after they had done all the market research, etc for the indepth business plan that the bank required!

If the information was ONLY being used for the purpose intended, I wouldn't mind handing over a customer list. However, in a small town like what I live in, I couldn't afford to lose my customer base.

[lawnman_scott]

I have been asked for a current list of my accounts receivables a few years back when I first started. My loan officer merely glanced at it, made note of the figure at the bottom and handed it back. They've never asked for one since then and I've had several "ventures" between then and now.

Perhaps this policy has lead many banks to a bailout that we get the pleasure of paying for.

[MarkintheGarden]

This is the concern. I have seen first hand banks using the "customer lists" for their own personal benefit, or the benefit of a family member or friend in the same business. On a similar note, also seen business plans turned down by banks only to have the very same business opened by bank bigwigs or family/friends. This, after the person applying for the loan was told the idea wouldn't work in our small community, AND after they had done all the market research, etc for the indepth business plan that the bank required!

If the information was ONLY being used for the purpose intended, I wouldn't mind handing over a customer list. However, in a small town like what I live in, I couldn't afford to lose my customer base.

If you have seen this first hand then your next action should be to see the District attorney first hand, and then you should be writing a letter to federal regulators. I am not saying that I do not believe you, but I would hate to think that this could go on. Even if a conviction is not possible, an investigation would send a healthy message to the local banking community.

I do not think that who your customers are is such a big secret, your bank already has that information, who they are and how much they are paying you, and if someone at that bank wanted to steal that info, well it is already there. The good news is that it takes more than this to take someones business.

In any case you can (and maybe should) do your banking and borrowing from out of town service providers, nation wide companies without an affiliate office in your area.

[ted putnam]

Perhaps this policy has lead many banks to a bailout that we get the pleasure of paying for.

Not sure about that. My bank is a smaller bank with only 9 branches throughout the state. They received no "bail out". They have become more strict since all of that began though. Copies of tax returns, photocopies of drivers license, etc... each time I ask for money. It's a little irritating because I know they have all this info on file already but I also know they are being required to dot their "i's" and cross their "t's" more carefully these days.

[lawnman_scott]

Not sure about that. My bank is a smaller bank with only 9 branches throughout the state. They received no "bail out". They have become more strict since all of that began though. Copies of tax returns, photocopies of drivers license, etc... each time I ask for money. It's a little irritating because I know they have all this info on file already but I also know they are being required to dot their "i's" and cross their "t's" more carefully these days.

Thats the point. Not your bank in particular, just banks in general. They are finally doing a better job, but look what it took for them to get it.