By Kaylan Pepin, CPA, CMA, Co-founder and CEO of Levr.ai. Kaylan spent his career in commercial banking at RBC, CIBC, and BDC before building Levr.
For bigger or longer-term financing, tax returns are where underwriting gets serious. They’re the government-verified version of your business’s story, and lenders weigh them accordingly.
What they are
In Canada, an incorporated business files a T2 corporate income tax return each year, and the CRA responds with a Notice of Assessment (NOA) confirming what was filed and whether anything is owing. Sole proprietors report business income on their personal T1. In the US, the equivalents are Form 1120 for corporations, 1065 for partnerships, and Schedule C on a personal return for sole proprietors.
Why lenders ask for them
Three reasons. Verification: returns are filed with a tax authority, making them the hardest financial document to inflate. History: two to three years of returns show the trend line behind this year’s numbers. And standing: the NOA reveals whether you owe back taxes, which matters because tax authorities collect ahead of most lenders when things go wrong. Outstanding tax debt is one of the most common late-stage deal killers, and it always surfaces.
How to get copies fast
In Canada, your accountant has your filed T2s, and NOAs are downloadable instantly from CRA My Business Account. In the US, your filed returns come from your accountant or tax software, and the IRS can provide official transcripts online. If you’re behind on filings, start catching up before you apply, since most lenders for larger products want the most recent year filed.
What underwriters check
Whether revenue on the return matches revenue on your application and bank statements, whether the business shows taxable income or persistent losses, and whether anything is owing to the CRA or IRS. Mismatches between application and return numbers are the thing to avoid most: they read as either sloppiness or something worse.
Which loans require tax returns
Mostly the larger, longer products: term loans, SBA loans, equipment financing at higher amounts, and anything bank-underwritten. Fast working capital products like MCAs often skip them entirely and rely on bank statements instead. Full list in what documents you need for a business loan.
The Levr shortcut
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Last reviewed July 2026.