Loan Application Assistance
To secure the lowest rates on your loans and lines of credit, it’s crucial to obtain competitive offers from multiple banks and leverage the expertise of seasoned professionals. Linked Accounting takes on the time-consuming task of coordinating lending requests with multiple banks, ensuring you receive the lowest available borrowing costs.
Bank Ratio Monitoring
Commercial lending and insurance bonds rely on numerous ratios calculated from your financial statements to establish a bank risk rating or business credit score. Don’t wait until you need a loan or bond to find out if your financial ratios qualify you. Our experienced banking professionals monitor your financial ratios and guide you towards improved banking capacity.
Tax Return Numbers vs. Generally Accepted Accounting Principles (GAAP)
Bankers, prospective buyers and company management prefer to make decisions regarding the financial condition of a company using financial statements prepared according to Generally Accepted Accounting Principles (GAAP). GAAP financial statements present an accurate picture of a company’s story. Linked Accounting assisted a company seeking to acquire more equipment which would help grow revenue and improve profit margins. Their current bank was in receipt of company tax returns filed on a cash basis and with accelerated depreciation of their fixed assets. The bank assigned their existing loans to the “Loan Workout” group due to the perceived poor financial condition of the company. Linked Accounting prepared GAAP formatted financial statements for the company. A general overview of the comparative balance sheets are provided:
Impact on Collateral
Lenders often consider the assets listed on a company’s balance sheet as the basis for determining the value of collateral for loan requests. In the above example, aggressive tax depreciation strategies had reduced the asset values and, subsequently, the available collateral significantly. The GAAP financial statements revealed a much larger amount of available collateral. Companies can continue filing tax returns as they have, with GAAP statements prepared in addition to—not in place of—tax returns.
Bank Consulting
Linked Accounting is well-positioned to help you obtain the best capital structures at the most favorable rates. With over 15 years of senior banking experience, our partners bring an insider’s perspective to the banking industry. Through services such as bank ratio monitoring and loan application assistance, Linked Accounting provides you with access to capital when you need it most—all at the lowest costs available.
Impact on Owner’s Equity
Owner’s equity is critical to lenders. Consider a homeowner seeking a mortgage when they owe more than the home’s value—securing an additional mortgage in such a scenario is highly unlikely. Similarly, in the example above, the company sought additional loans when its tax returns suggested a $992,682 deficit. However, the GAAP financial statements accurately reflected nearly $200,000 in equity.
The Outcome
With GAAP financial statements, the company received additional lending offers at reduced rates from four different institutions, even when their current bank initially declined further loans. Linked Accounting helps you secure the best capital structures at the most competitive rates!
