If you own 20% or more of another business, it is considered an affiliate business, and you must provide the two most recent consecutive years of tax returns for each affiliate business. This requirement applies even if the affiliate business is in a different industry. The SBA defines an affiliate as any business in which you have a significant ownership stake (20% or more), regardless of whether it is associated with your primary business.
The lender needs these tax returns to understand the financial health of your affiliate businesses, as they may impact your loan eligibility. The full returns, including all schedules and attachments, give a complete picture of each affiliate’s finances.
This document should include:
Full returns: Complete tax filings for the last two years.
Schedules and attachments: All supporting documents from the tax returns.
Providing this helps lenders assess the financial stability of both your main and affiliate businesses.