It’s an exciting time when you decide to start a new business, or expand an existing one. As not many companies have the capital required to undertake new ventures, a nerve-wracking finance application is needed. It’s estimated that one in five Australian businesses have been refused a loan in the past two years.
While banks will no doubt look at many factors when considering your business loan, your business’ financial situation will probably be the most important one. Here are some of the distinctive ways that a company accountant can improve your chances of approval.
- An accountant can help you figure out what you need versus what you want
It’s easy to get caught up in the excitement when starting or expanding a business, and you might want to buy new equipment and work in a popular location. A business accountant can help you separate your wants (such as a premium office in Melbourne’s CBD) from your needs (a smaller, but adequate office in Melbourne inner/outer suburbs), which means your loan application only takes the essentials into account.
- An accountant can help you see yourself realistically
Your bank is going to want to know what you bring to the table and your ability to repay the loan. If you’ve already been in operation this will require previous details on your financial conditions, but what happens when your business is still an idea? How can you tell what your cash flow and projections will be? An accountant will help you to work out details regarding your projected debt accumulations in your first year of operation, your liquidity ratios and more.
- An accountant can give your business a ‘makeover’
One of the most valuable things that an accountant can do for you and your future business is to give it a makeover. Corporate accountants know banks and how they think, and will help you to present yourself in such a way that you’ll appeal to them. They will help you to prepare yourself for any questions you might be asked so you can answer them honestly, and with confidence.
It doesn’t matter what stage of business development you’re at, by partnering with an accountant, you’re giving yourself the best chance of getting your loan approved.