FINANCIAL REPORTS – A SOLUTION
Business Loans – Financial Reporting
Business Loans – Financial ReportingA major part of securing business funding is the ability to show the funder a forward projection of how the business will perform over the next two years. The reason for this is to show firstly, that the business understands its trading markets and secondly to show that there will be sufficient funds to ensure the loan will be repaid.
Usually this forward facing suite of documents contains at a minimum two key requirements
- A profit and loss report that shows a breakdown of performance on a monthly basis
- A cashflow statement that shows how the trading conditions will affect the cash position of the business and how the business loan will affect that.
A third document is sometimes required and this is the balance sheet that provides a liquidity status of the business at a point in time, this is usually required for two years
For many reasons some small businesses do not have access to these documents and this can cause a real problem for the business and the business loans company. Northwest Business Funding has found that for an accountant to produce even the basic two sets of documents the costs range from £350.00 to over £500.00. This money will not guarantee that the documents produced will secure a loan, as many other factors influence that decision. What can be said is, that it is unlikely in most cases that a business loan will be provided if these documents are not present.
For some small businesses to have to create this information and present it the correct format may seem a burden. While it may be; they are a necessary part of the application process. Also, these documents provide metrics, that are based on live business data as a business general rule it is a good discipline to set annual forecasts.
FIANCIAL REPORTS – A SOLUTION
To address this issue Northwest Business Funding has launched a new service as part of the application process. For a small fee £150.00 North West Business Funding will prepare and present these documents a sample can be found below. Of course information from your business will be required but the modelling will be handled and the reports generated by Northwest Business Funding at the end of the process the business will have a full two year forecast, to include Profit and Loss, Cashflow and Balance Sheets with a full two year financial summary and dashboard. Much more than most accountants will produce.
These documents have been checked by several banks and business loans providers and they are very satisfied with the presentation and the information within, making the application process easier for the business.
For more information or to see a full sample set of the documents please contact accounts@nwbf.co.uk
