In Accounts Receivable, Asset Based Lending, Business Planning, Commercial Financing, Factor Financing, Finance, Financial Documents, Loan Approval, Working Capital

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When you apply for financing and your tax returns and/or personal financial statement shows that you have interests in other businesses or property, the lender will want to review the financials on those other businesses.

When it comes down to it, the Lender has the right to ask for this information.

The question from our client is often, “Why is this germane to my financing request for my business?  That other business has nothing to do with the business I’m financing.”

While this may be true, remember that you’re asking the lender to assess the risk of lending money to you and to your business (the one on the application), and if there are negative aspects to your other businesses that affect the financial health of this business, the lender wants to assess that risk.

The good news is that you can control the narrative to an extent. Describe what the other business is via a summary statement and how it interacts with the business you are financing.  Especially with regards to debt.

There’s nothing wrong with full disclosure.  Get it out of the way upfront. Don’t wait for the Lender to ask for it.

Understand why the Lender wants that information instead of fighting the request.

The Lender has the right to ask these questions.  Pushing back is okay, as long as you do so in a gentle fashion.  In the end, it’s about achieving your goal of obtaining the financing you need to grow your business with the least muss and fuss as possible.

Contact with questions about the most important documents to have in order at all times. Solutions@AuroraConsulting.biz.

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