The preparation of a finance application can range from a basic process to deeply complex once. And while “basic” can hold little appeal, we always remember that a finance application is normally significant to the person making the application – it could be their home, first investment property or their new car.
At a basic level, your business accountants will assist in with a finance application by sending the bank a copy of your ATO of Tax Assessments and a printout of your current tax debts. This will show the bank that you currently have no obligations ATO, you are up-to date with tax returns and it also acts as evidence of your taxable income. This simple act, done quickly and promptly, can distinguish between a family being successful or not with a finance application.
For more complex financial applications, the bank should be treated as an investor in your business. You should have clear accurate reports about your financial position and where you are headed. This application could be done through a boardroom presentation of a business plan backed by 3-way forecasts supported with the board minutes comparing forecasts to actuals and market analytics. For a micro or small business: it can sometimes be done just by emailing the financial reports.
When the bank takes on a business relationship with a business they will classically the bank will assess a business within the “5 C’s” of lending. The 5 “C’s” of lending are the five factors the banks consider – your Collateral (net assets offered as security), Capacity to pay (level of profits), banking Covenants (like monthly reporting obligations and such), the Credit history of the person making the finance application and the Character of the person making the finance application.
The Character of the finance application is generally seen as the most important in the process. And it is where, at Westcourt, we make a real difference. Our focus on the finance application is to show the bank that your business governance is sound: you run a business with accurate information: you are managing forward cashflows: you are looking at clear reports and you ultimately know the cost of a decision before you make it.
The engagement of your bank as an investor will make a significant difference to your finance application. So matter like bank reporting, timely tax lodgements (including a clean Statement of Tax Record), market position review, competitor analysis and security positions offered are all relevant to the success of a bank finance application.
At Westcourt, we help clients facilitate and prepare their finance applications with their finance broker, mortgage originator or bank. And because we are independent, we can work collaboratively with your chosen financier and your team to get you the best option for your loan application without the pressure to cross-sell you to another related party for a conflicted remuneration model.
With our real-life business experience in creating a business, commitment to independent advice, focused service offering, timely turnaround, proven tax excellence and upfront pricing – Westcourt is ideally suited to act as your business accountant and help with your finance applications – so why not call us today?