Seeking an approval for a?Small Business Loan through Skytop Business Loans is one of the easiest processes for business owners of all industries and sizes because of the low requirement of documentation. As we boast that we require “Cash Flow” not “Personal Credit” – our decisions are made from a one-sided one-page application, and the three most recent months of business bank statements.
Why bank statements? – Well, it is the quickest and most accessible gauge of a business’s cash flow health. We are looking to see healthy deposits – to determine the businesses ability to payback, and to pay back which amount. It is this decision making process that is a large contributor to our well known Bad Credit Business Loan Approval process. If your business has cash flow, and the ability is there to payback the obligation why should the opportunity to do business together be pushed aside because of personal credit hiccup that may have happened due to a wide variety of circumstance; none of which effect the businesses ability, in any way to fulfill the obligation of the loan or advance. To us, a business’s ability to repay is the most important factor when determining an approval – and cash flow is the most important factor when determining that ability.
Some call it common-sense underwriting, we call it the path to a 48 hour business loan. When you take away the need for personal collateral, and streamline the process the way we have – you are left with a painless process that can move from start to finish in a mere 48 hours.
Beyond bank statements, tracking your business financial data is extremely important when seeking funding for ?your business to reach the next level. In addition, keeping accurate active tabs on your business can help ensure your products and services are priced right, identify what your margins are, determine your cash flow needs and equally important make filing taxes easier!
Though not required for all deals – there are three basic financial statements that are important for your business. If you don’t keep these records current, you should, regardless of your situation in regards to lending. Without knowing where your business is at, how can you determine where the business is headed? It really is that simple. Let’s talk about the three common reports you should have readily available:
1.???? Balance sheet.?This statement provides an overall financial snapshot of your small business. As an equation, it looks like?liabilities + owner?s equity = assets. The two sides of the equation must balance out.
Assets: There are two types of assets: current and fixed.?Current assets?include cash or other holdings that can quickly be converted to cash within a year. (inventory, prepaid expenses and accounts receivable.) Fixed Assets are essentials you are not planning to sell. (Think machinery, equipment, land, buildings, etc.)
Liabilities: “Current or?Short-Term liabilities”, such as accounts payable and taxes, and “Long-term debt”?such as bank loans or notes. Owner?s equity includes any invested capital or retained earnings. ?
If you captured all of your accounting information correctly, both sides of the balance sheet equation should be equal.?
2.???? Profit and loss statement.?A profit and loss statement, known as a “P&L” or “Income Statement”, enables you to project sales and expenses and typically covers a period of a few months to a year, but would not be used in an attempt ?to accurately project beyond that.
To determine net profit, subtract total operating expenses from gross profit. (Gross profit ? total operating expenses = net profit.) Remember that gross profit is calculated as total sales?minus?the cost of goods sold. Costs of goods sold include things like raw materials, inventory and payroll taxes. Make sure to also factor in overhead costs such repairs, utilities, insurance and legal fees into your operating expenses to ensure your net profit is accurate.?
3.???? Cash flow statement.?This statement highlights how much money is coming in to (cash inflows) and going out of (cash outflows) your business.?Cash inflows?include cash sales, accounts receivable collections, loans and other investments. Equipment purchased, expenses paid, inventory and other payments are considered?cash outflows.- Your business bank statements are possibly the best, and most accurate way to show this.
?(Beginning cash balance + cash inflows ? cash outflows = ending cash balance.)?
We hope that touching on these topics will help your small business stay organized, and put together a plan for growth. When you see an opportunity, seize it! – don’t wait around for months as 85% of applicants are getting declined from the traditional banks – lets grow, together. Check us out at www.skytopbusinessloans.com or simply pick up the phone 844-323-5626.