1 - Your financial statements are up to date, accurate, complete and presentable. This includes an income statement (year to date to most recent month end) and a balance sheet as of the same date. Spend the time and expense to have a CFO accountant review these and make sure they are correct. Otherwise, this will reduce your credibility and at a minimum significantly delay your funding.
2 – make sure you present a very well thought out use of funds statement. This will show what capital you need, how long you need it, any collateral / security, and amortization sought. On real estate you can hope for, at best 60% loan to appraised value (LTV), and on equipment, you can likely get a higher LTV rate with a capital lease.
3 – You will also need to demonstrate that your business revenue is more than enough to cover the new monthly debt payment (best to have 4 to 1 ratio or more). Having a decent, credible, 3 year projected financial model will greatly help you in closing a deal where your current financials are not quite up to par.
4 – Have your personal financial statements ready as well, including 3 years of prior tax returns. The lender will very likely require personal guaranty. If you follow the above steps, you will significantly increase your odds of raising capital, dept or equity, and in a timely manner. Having a CFO accountant on your team is a huge plus as well that can coordinate getting these items to the lender.
At Three Pillars Bookkeeping we help clients with tasks like these. As a business owner for over 20 years myself I can relate to what you are going thru. We will help guide you to get you on track or help manage and understand your numbers. Please reach out with any questions.
Alex Bulmer - Three Pillars Bookkeeping and Business Services