The Cost of Transcript Access
Obtaining tax transcripts from the IRS is mandatory for many SBA loans, and it needs to be done for every single owner with more than 20% stake in the business and all affiliate entities.
Traditionally, lenders need to fill out and chase down signatures on IRS Form 8821 or 4506 from each of the business owners in order to access their official IRS tax transcripts and verify their financial information.
SBA lending also requires a comprehensive assessment of the applying business’s “ownership web”.
In addition to needing transcripts for each of the owners’ personal finances, if any of the owners also have a stake in any other business that qualifies as an affiliate, transcripts are needed for those entities as well.
The Traditional Process
Suddenly, an application for a small business loan requires a complicated web of 7 different tax transcripts that need to be acquired and reviewed. This also means filling out and collecting 7 different 8821 or 4506 forms and chasing signatures for each one.
Beyond the manual work to obtain the signatures, the tax transcripts are only a one-time pull. These transcripts only reflect the tax data that exists for that individual at the time the transcript was requested. This transcript does not update as new tax data is available, so lenders cannot use the transcript to continue monitoring borrowers throughout the life of their loan.
And it’s not cheap, either.
Accessing just one transcript can cost over $100, and you always run the risk of your request being rejected.
Depending on the number of owners and their additional affiliate entities, one loan application can easily rack up thousands of dollars in transcript fees alone.
Either lenders must eat that cost or push it onto their borrowers, effectively increasing the difficulty of borrowers getting access to the financing they need.
Saving Money and Time With TOD
TOD is committed to simplifying this process, not only by decreasing the cost of transcript access, but also by decreasing the amount of time and hassle required to verify borrower tax data.
TOD onboarding is simple, getting your customizable portal up and running within just two weeks.
Crucially, TOD can save lenders 50% or more on transcript access.
As a high-volume facilitator, TOD processes over 1,500 transcripts monthly, uncovering 100+ undisclosed tax liabilities and saving 400+ personnel hours weekly.
With e-signatures and pre-populated 8821s, lenders don’t need to waste time chasing borrowers to sign the necessary IRS forms.
Its secure, user-friendly interface and intuitive dashboards make it easy for lenders to manage loan portfolios efficiently.
Not only can lenders access tax transcripts with less hassle, but TOD offers ongoing monitoring, allowing lenders to keep track of borrowers’ financial standing throughout the life of their loan using the same IRS form and e-signature process. Lenders receive alerts to changes in borrower tax profiles, allowing for timely risk mitigation and simplified reporting.
The platform also includes advanced search and filter capabilities, enabling users to quickly locate taxpayer data across large portfolios.
In underwriting, TOD accelerates income verification and fraud detection by providing direct access to IRS-sourced data, helping lenders make informed decisions faster.
Borrowers benefit from a smoother experience as TOD reduces document requests and eliminates the need for repeated follow-ups, thanks to continuous access enabled by IRS Form 8821.
And if any IRS issues occur, TOD’s customer support is ready to assist.
Improving Your Lending Process
The reality is that SBA lending is consistently growing year-over-year, yet simultaneously compliance is becoming stricter.
Keeping up with this rapidly evolving industry means evolving processes to be more efficient and streamline costs while staying compliant.
TOD offers the advanced technology to help you do both.