The lender will also want to know if the statements have been prepared and audited by a certified public accountant. In an effort to go beyond a strictly numerical analysis, good finance companies will weigh other factors in their effort to provide a viable financing agreement. Unused and available bank credit lines or other credit facilities can be factored into the equation. They will reveal whether there is a sufficient reserve to buffer against minor cash flow problems. Reflecting a strong management team Financial institutions assess intangible factors, such as the company's management strength.
Past performance is a good indicator of management's capability.
The nature of the equipment is very important. Astute financial institutions will conduct a thorough evaluation of the equipment and seek to positively include this in its decision where possible. Finally, references are extremely important especially if the finance company hasn't worked with you before. Having your financial information packaged and available for a finance company to analyze evidences your awareness and knowledge of the financial side of your business, and demonstrates your desire to form a financial partnership that can last well into the future. Making the most of the relationship One of the most significant things to remember about working with specialized financial sources is to make the process an honest exchange of information that will allow both parties to structure the best possible transaction.