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September 2008
Do You Have A Borrowing
Checklist? - Part 2
Last month we shared 5 items that will make the borrowing approval process quicker and easier. This month we have some more items to add to that list. You may be already on top of these items, in which case- outstanding! If not, hopefully this will be a useful business guide
Most leases under $75K only require a one-page credit application but often times other issues come up or the equipment you’d like to lease is a higher amount. Knowing pertinent company information or having it easily accessible will save you precious time and let you get back to focusing on what you do best!
Sam Thacker from Allbusiness.com has put together a borrowing checklist. Here are a few more important items that we often trip across at First Star:
1. "Know several important statistical characteristics of your business. Here is a partial list of information that management should always know about their company through the last interim financial statement:
a) Year to date gross sales
b) Year to date gross and net profit
c) Current accounts receivable balance
d) Current accounts payable balance
f) Projected annual sales for the current year.
2. Know what lenders / trade vendors have filed financing statements.
(UCC’s) against the business. Have copies of them and understand what collateral is secured. Knowing in advance who has a blanket lien on the company is very useful, particularly if you’ve already paid for some or all of the equipment.
3. Keep a one page, smartly worded, easy to understand description of your business.
This is particularly important if your business is complex and unique.
4. Write a quick and easy to understand description of the equipment you are looking to acquire and how it fits into your operations. Just like your business may be complex and unique- so too with the equipment. Briefly explaining what the equipment is and how it fits into your operations can help speed up the approval process.
5. If your leasing request is higher than $75K (or in some instances $100K),
you’ll need to provide the last 2-3 years of completed business tax returns and financial statements. "
Don’t be overwhelmed. You won’t be asked for all of these items- you may not be asked for any of them. But staying on top of such items will not only help you when it comes time to acquire some new equipment, it just makes good business sense. Our goal at First Star is to help your company grow and succeed. Being a well-informed borrower is key to your success. |
