Assuring the success of a
small business can depend on many factors. However, two of the most
important factors of small business survival are assuring that your
office expenses do not continue to rise through rent increases and
having access to working capital for expansion of your business when
necessary.
Although banks claim to be
small business friendly, most of us realize
that this is not the
case when you request a commercial loan or line of
credit. This is
mainly due to the banks’ inability to realize that small
businesses
have different financial objectives and resources from that of
the
mid-size to large corporations.
Planning
Mid-size and large
corporations have in house accountants that are constantly
structuring the company’s financials depending on their financing
requirements. For example, a company that knows they will need to
expand their facilities next year will attempt to control their
expenses this year in order to show the bank a healthier income
statement at their last fiscal year end. Assuming their year end is
December 31, a substantial expense that they needed in October or
November such as marketing, technology, accounts receivable charge
off, accelerated depreciation, etc would be left for January 1st
of the following year thus reducing their expense and enhancing the
net operating income on the financials they need to provide to the
bank.
Small businesses for the most
part would instead manage their own bookkeeping and usually only
request for the accountant to prepare their year end financial
statements and tax returns. Without the in-house accounting
planning, most small companies would not be able to manage their
expenses accordingly to plan for financing requirements such as a
commercial real estate loan.
Capital Requirements
Another great difference
between your small business and mid to large businesses is
liquidity. Most small businesses maintain significant less liquidity
than its largest counterparts because of inability to secure lines
of credit. Cash flow is strained as most small businesses are in
growth mode and the majority of its cash gets reinvested back into
the business to finance growth.
At Platinum Star Financial,
we understand small businesses and continue striving towards
compiling flexible real estate commercial loan options for our clients.
With the introduction of the 97% financing commercial loan coupled
with our flexible underwriting, a small
business owner can now afford to make their best business investment
without diminishing their working capital.
