Financing and lender readiness
Asking a lender for a facility with a forecast showing what it is for and when it is repaid is a different conversation from asking because the account is low.
This is part of the fractional cfo half of a fractional CFO and controller engagement.
Quick answer: Lender readiness means the statements a lender relies on exist and arrive on time, the covenant reporting is produced rather than scrambled for, and any request is supported by a forecast showing the purpose, the drawdown and the repayment. It is the difference between a renewal that is routine and one that is a negotiation.
What a lender is actually reading
- Year-end statements at the level the facility requires, which is stated in the agreement rather than negotiable afterwards.
- Covenant calculations, produced on schedule and reconciled to the statements.
- Receivable and payable ageing, because concentration matters more than the total.
- A cash forecast covering the term of what is being asked for.
- Consistency between periods, which is what builds the credibility the numbers themselves cannot.
Where the facility calls for assurance rather than a compilation, that is a separate engagement and it has its own preparation — audit and review readiness covers it.
Covenant reporting stops being a scramble
A covenant breached because the reporting was late is the same as one breached on the numbers, from the lender’s side. Most covenant packages ask for figures a business already has, on a date it can predict, which makes lateness the avoidable failure.
Producing the package as part of the monthly pack rather than as an annual event costs almost nothing extra and changes how the relationship reads.
Asking for money well
The three questions a lender asks are what the money is for, how it will be repaid, and what happens if the plan is wrong. A thirteen-week cash forecast and a twelve-month view answer the first two directly, and a sensitivity on the forecast answers the third.
Businesses that arrive with those three answers borrow on better terms than businesses with the same financials and no plan, which is the part owners are most often surprised by.
Who this is for, and who it is not
A good fit: a business with a facility to renew, a covenant package to report on, or a purchase, a building or an expansion to finance.
Not a fit: a business with no debt, no plans to borrow and no external reader of its numbers, where this is preparation for something that may never happen. We say so on the first call rather than quoting for work you do not need.
Common questions about lender work
Do you talk to the bank for us?+
Our lender wants audited statements. Can you do those?+
How far ahead should we start?+
Is this included in the monthly fee?+
Talk to a CPA about this
One Chartered Professional Accountant, start to finish. Fixed fees, quoted in writing before any work begins, and no obligation from a first conversation.
“Sunny and his team have been completing my bookkeeping, taxes and financials for the last 2 years and they have been amazing. Thank you!”