Small businesses are the backbone of America, making up nearly half the workforce and almost 44% of the GDP.1
Your small business or business idea is vital to the fabric of the US. You provide employment and help pump money into your local economy.
As a business owner, you may need a business loan for many reasons:
- Start-up funding
- To buy additional equipment
- To grow and expand
- To invest in some much-needed upgrades
Walking into the bank or loan office alone can leave you vulnerable to less-than-ideal mistakes or terms for your unique business needs. These could prevent you from getting the funding you need to thrive or cost you in the long run. Any number of scenarios could send your business on a rocky path.
Don’t go it alone. Hire a business accountant to help you with all the ins and outs of securing profitable funding. Here’s what a knowledgeable accountant can do for you.
Foundational Work
Securing a loan takes preliminary work, like bringing your books and taxes up to date to paint the best financial picture of your business. An accountant can help you organize data and prepare the necessary paperwork, like:
- Three years’ worth of company tax returns
- Three years’ worth of year-end (December) financial statements
- The prior month’s financial statement
- Yours and all partners’ personal financial statements
If you’re trying to start a business, you won’t have an established company background, financials, or tax returns to consider. However, you’ll need to show
- Data-driven predictions and estimates going out two to three years
- A balance sheet displaying your and any partner’s financial health
An accountant can tell you if any part of your financial foundation isn’t up to par. They can assist you with getting up to standards.
Furthermore, an accountant can help you with other pre-loan planning, like the reason you need it, how much you’re hoping for, how you’d like to finance it, and getting a bank loan versus an SBA (Small Business Association) loan.
Application Process
Securing a business loan can involve mountains of paperwork with plenty of legal terms. These things can be challenging to wrap your head around if you aren’t an experienced accountant. Let an experienced accountant help you with it.
Accountants can review all paperwork and tell you in plain language what everything means and what to do. They can help you accurately present and tailor the appropriate data to specific lender or investor needs.
Negotiations
With an accountant in your court, you can have the confidence to know you received the best loan terms. A bank or loan office might offer a seemingly attractive deal, but details matter. For instance, the longer the length of your loan, the more interest you’ll pay.
An accountant can help you decide whether to accept a loan offer or keep looking. Furthermore, they can help you negotiate better terms on variable amounts that get tacked on to the loan, such as the following fees:
- Credit checks
- Application processing
- Loan processing
- Collateral appraisal
- Prepayment penalties
Don’t accept just any offer. Shop around. Negotiate. Make sure you get a good deal.
An accountant can help you do that better. Plus, the time an accountant spends doing this for you is time gained for you to do the many other things running and starting a business requires.
Education
Many entrepreneurs have a skill or knack that has nothing to do with accounting and taxes. Let an accountant educate you on your business’s financial ins and outs every step of the way.
Your accountant can boost your odds of business loan success by teaching you how to organize, present, and explain your financial information. You’ll learn things like how to arrive at those financial projections loan officers want.
Additionally, they can help you see things from the bank’s perspective. A bank has to protect themselves to stay in business. Can they trust you? Does your business or business idea seem like a good investment for them? If your company closes, do you have the resources to repay the loan?
Alternative Solutions
A business loan puts you in debt for years to come. If you don’t require a large lump sum immediately, you may have other options you haven’t considered.
A business CPA can help you look at your entire financial picture. They may find ways to free up money to prevent you from needing a loan. You may be able to put money into savings every month that would equal what you’d pay for a loan. In time, you’ll save the amount you need and can borrow from yourself without debt and additional interest payments.
Tailored Solutions
Hiring an accountant for the business loan process can save you time and money in the long run. An accountant can help you achieve business success by helping you spend wisely. You don’t want more debt than you need when it comes to loans.
If you own or hope to own a business in the Charlotte, NC, area, you’ll likely want a Charlotte CPA firm to have your back. They understand the local area, rules, and regulations best. They have relationships with reputable lenders and can point you in the right direction.
Don’t waste time, energy, and money white-knuckling your way through financial and accounting necessities when your talents likely lie in the more creative part of business ownership. Hire an accountant or accounting firm to handle the financial part more skillfully.
____________________
1https://www.uschamber.com/small-business/small-business-data-center
