It is not a secret that since the GFC it has become increasingly difficult for businesses to convince the banks to lend them money.
The banks’ credit departments will scrutinise each loan applicant and assess the soundness of the business to ensure the borrower has the capacity to repay the debt (despite what you may think of banks, they are not in the business of foreclosure and want to avoid this possibility at all costs).
For many business owners, the borrowing process puts a whole new set of business terminology and concepts in front of them that they had previously not considered:
- Working capital
- Interest cover
- Current ratio
- Debt/equity ratio
- Total liability/equity ratio
- Debt service cover
If you are lucky enough to get finance, the bank then places lending covenants over businesses to ensure they continue to be healthy enough to make their repayments. If the business breaches their covenants, the bank has the right to recall the loan, something most would find impossible to attend to without having to liquidate assets.
If you are looking to apply for a loan or you have an existing loan and are concerned that you maintain your lending covenants, please contact us.
We have the same software that five of our major banks use to assess your status.
WE CAN:
- Pre-assess your chances of attaining a loan
- Put a package together for you to take to the bank that could help the loan process
- Put together projected budgets, cash flows and balance sheets
- Look to strategies that will improve your chances of attaining a loan or ensuring you do not fall in breach of your lending covenants.
Please call us on 9548 5155 or click here to make an appointment
