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Chartered Accountants

Trusted advisers of all tax compliance and annual accounting issues facing both individuals and small businesses.

Guide to successful business borrowing

Posted on Sep 15, 2015 by editor

It is important for businesses to maintain a good relationship with their bank in order to safeguard their future access to funds.

  1. Prepare a strong business plan

This is one of the first steps to ensure that the bank will identify it as a low risk business and therefore someone they are willing to give funds to. A solid business plan highlights the viability of the business, information about the experience and success of the owners and managers, expenses which the loan will cover,as well as detailed sales expectations.

  1. Establishing a personal relationship

Over time, an owner establishes key contacts within their bank that are familiar with their business and financial needs. Keeping these contacts informed of any changes to the business or cash flow projections before it comes as a surprise will build trust between the bank and the business.

  1. Knowing your business inside out

By keeping themselves updated of their own financial status, by obtaining credit reports and public records, business owners will know what research the banks will obtain when deciding on the amount, if any, to loan to the business.

  1. Learn the banking language

Understanding banking terms such as credit ratings, cost of capital and other financial drivers will place business owners in a strong position when negotiating the terms of their loans.

  1. Keep the adviser informed

Financial advisers are there to advise and will have an intimate knowledge of bank processes. Keeping them posted of any plans or changes will allow them to better advise the business on the best course of action, and ensure that the business will continue to prosper.

Garry Hughes has been the Orewa North accountant for the past 17 years. The key to this long association has been the efficient manner in which Garry has performed his preparation of our accounts. It has been a pleasure to deal with someone whose working relationship has been friendly and exceptionally flexible when fitting in with the school needs and the ever changing Ministry of Education regulations and reporting requirements. It is good to know that sound financial advice and guidance is only a phone call away.
Bruce LawsPrincipalOrewa North Primary School

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