How can an Accountant in Mississauga help my business obtain a bank loan or line of credit?

Accountants in Mississauga can assist you with your company’s financing objectives, including obtaining a loan or line of credit from the bank.

Evaluate Health of Financial Statements

First, an Accountant in Mississauga can evaluate the health of your company’s financial statements to determine the likelihood of your company being approved for a loan.  Companies that have a strong balance sheet and are profitable are more likely to be approved.

Good Relationship with Bank Managers

Second, a good Accountant in Mississauga should already have working relationships with account managers at the major banks, which helps with processing your company’s loan application quickly.

Review Engagement Report

Third, Accountants in Mississauga who are also Chartered Accountants can prepare a review engagement report for the bank on your company’s financial statements.  For large loans, banks may require that your company’s financial statements be reviewed by a Chartered Accountant.

Compile Financial Forecast

Fourth, an Accountant in Mississauga can compile a financial forecast, which shows the cash-flows that your business is expected to generate in the future.  Again, this is a requirement by many banks.  Companies with strong, positive, future cash-flows are more likely to be approved for a loan. For a more detailed explanation of cash-flow forecasting check out this article.

Negotiate Favourable Credit Terms

Finally, an Accountant in Mississauga can help negotiate a lower interest rate with the bank and/or more favourable credit terms.  In certain cases, the lender may want to impose restrictive covenants (such as high working capital ratios, or low debt to equity ratios), which impairs the company’s flexibility in purchasing new assets or taking on more debt.

ABOUT THE AUTHOR

ALLAN MADAN

CA.CPA.CGA

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

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