Advivo Partner, Dale Edwards, outlines what information you need to prepare when obtaining finance
As accountants, we are often asked by clients to prepare their financial statements and tax return “urgently” as they have just made an offer for something that they need to finance and the lender is asking for their most recent (or in some cases, multiple years of) financial records that don’t yet exist. This causes delays with borrowing money from the bank and, in some unfortunate instances, eventuates in the failure of the contracts that have been signed.
What can you do differently to prepare for borrowing money?
There are several things that business owners are almost guaranteed to be asked for by any lender if they seek to borrow funds. It makes sense then, to collate all of that information prior to seeking finance so that the timeframe can be shortened and the process made much less stressful for the business owner, who will no doubt already be under additional pressure given the need to seek funds from a lender.
A far from the comprehensive list of these things include:
- All Trust deeds and amendments for any trusts involved
- Company Constitution and certificate of registration/incorporation
- ABNs for borrowers and shareholders (if they have them)
- Last several years financial statements and tax returns for lenders and possibly for connected entities (if not all up to date, this will be a massive problem)
- Ensuring that your financial statements are clean, unpolluted by “personal” items such as non-business cars, home telephones, family holidays and such. These items at face value reduce the profits shown and will cause the lender to doubt that the business has the capacity to service a potential loan
- Reports for ATO portal showing the status of ATO lodgements and payments (if not up to date and fully paid this will be a massive problem)
- Copies of BAS statements for the last several years
- Forecasts for next 2 years – especially important if the historic performance of the business is not representative of the anticipated future performance
By having these things sorted out in advance you will avoid delays in the loan application process. Showing the lender that you are organised and have all the information that they will need readily available without delays, you demonstrate that you will make a good customer for them.
Advivo is here to help
Advivo can help you with being prepared with up-to-date financial information. Our Monthly Service Programs (MSPs) are specifically designed to ensure your financials are current, accurate and appropriate for such information requests.
If you are looking to successfully raise finance, you will need a business plan backed up by current forecasts and accounts. This can be difficult to do using a set of accounts that are over 6 months out-of-date, especially if your business performance has changed significantly since the last fiscal year-end. Advivo’s MSPs ensure that your financial records are always up-to-date, making the process of obtaining finance far less stressful for you.
Please contact us today at 07 3226 1800 or email us at email@example.com to discuss which MSP package is best for you. We have a talented team of business advisors and accountants in Brisbane CBD who will listen to you and take a hands-on approach to manage your business and take it to the next level.