Bank Finance needed to Support your Business - Consider a 11-Point

Most of the bank's financial request was rejected not because the customers are poor credit risks, but because they have applied to your bank badly prepared. Get ahead of transmitting the necessary information for the first time.

Cash flow provided data to show you understand and can manage your working capital (debtors, creditors and securities) and enough money for your business bank interest article, as well as other basic expenses, such as the tax on dividends and capital replacement). "Cash is king, and even profitable businesses can fail if the money is managed. Understanding your cash transportation, and you may even need to borrow less.

OUTLOOK The current forecast, which transmit the required amount, payback period, risk and return to pot. Figures should be more refined than the projected sales and profits, and ideally should show a link between the profits on your balance sheet and cash flow. Sensitivity analysis is important to help the bank understand when they are at risk of retention. Estimates should always be based on the latest actual data.

MARKET Explain your market. Focus 20% of your effort to explain what happened, and 80% of what you expect to happen and why. Do not worry, top economists sometimes get it wrong. You need to show the bank was able to think of it as the likely outcome, and that you have a clear action plan.

MIX AND QUALITY customer details to customers by name / industry / region / duration of the contract. Strength of our clients and their ability to pay = your business strength. Create your business around a single client is a major business risk.

Give the bank to update the management information to date, especially if the annual report of. Information should be made at least once a quarter, divided into sections / region and includes the income, balance sheet and cash flow faults. Management information should be used to update the forecast / budget data, and any differences should be explained.

Need a bank liquidity Show that your business is liquid and can survive. Tell them how fast you can get your hands on the money and to know your debt-payment terms, credit terms, and what the money tied up assets. Think about more than just current assets / current liabilities ratio, and to consider the liquidity of its ideal position. Remember, too much liquidity - assets that can generate higher returns elsewhere.

INCOME (LOSS) Know your financial definitions. Are you talking about gross margins, operating profit, net profit, or EBITDA (earnings before interest taxes, depreciation and amortization)? All corporate financial analysis. Also ensure that you discuss your industry seasonality and cyclicality.

CONTEST Tell the bank, how do you compare to your competitors? Be prepared to discuss your competitors' strengths and weaknesses. This provides confidence that you are a proactive management team that truly understand the business.

ACTION Close your business activities or divisions and to tell the bank that performs well, but that is a money drain, and why. Explain how the chapters supplement or overlap each other and for each Strategy. Be prepared, if necessary with the forecasts.

If you set up records for at least 3 years of bank accounts (ideally 5 years, if approaching a bank) and up to date management accounts. The Bank will have a financial analysis of these data the relative differences in trends. It will also give them confidence in their management of records.

EQUITY, DEBT AND BALANCE your own risk (Equity / directors loans), compared with the risk of the bank. Know the real strength of its balance sheet, taking into account current market values ??of assets in the hands of a debt and any information (including off-balance sheet exposure, such as rent and guarantees). Be clear from the outset, what is security and can not offer.

Send Financials financial analysis by industry experts and qualified accountants, bankers and city Skilled analysts are talking with the language. Using our comprehensive financial package can make a professional approach to lenders and choose the best offer and negotiate from a stronger tax position. We do not believe the template approach, because each business have different drivers and needs. Therefore, we develop custom financial models to predict sales, profits and cash flows. We also offer historical, competitor and market analysis.