Getting the right loan with the right bank.
PREPARING FOR THE INTERVIEW
* Select three banks to interview.
* Establish what the financing needs will be and how the funds would be used.
* Determine desirable interest rates and repayment period.
WHAT TO INQUIRE ABOUT DURING THE INTERVIEW
* The bank's knowledge of the accounting profession.
* The amount of financing the bank will provide.
* Cost of financing, including repayment terms.
* Various bank services and pricing of those services.
* Possibility of developing working synergies as a way of establishing sources of new business referrals.
* Bank technologies, such as online bank transfers and balance information and overnight investing.
* Personal loan and other executive banking privileges available to partners and other key executives.
* Requirement for owner's personal guarantee of firm loan.
AT THE INTERVIEW, THE FIRM SHOULD SUBMIT A COMPREHENSIVE PACKAGE THAT INCLUDES
* An introduction of the firm, including its size and structure, and a listing of its owners and decision makers.
Include a copy of the firm's brochure.
* An outline of the firm's banking needs, including dollar amount of each type of financing required, working capital line, term loan and requested repayment terms.
* A cash flow summary of the expected uses of new financing.
* Cash- and accrual-basis income statements and balance sheets for each of the past two years.
* Cash flow statements for each of the past two years.
* Budget and cash flow projections for the succeeding year.
* Current-aged work in progress and accounts receivable.
* Billing rates for various stratified levels of owners and associates.
TOM POLICANO, CPA, is an audit partner of David Berdon & Co. LLP, an accounting firm based in New York City.
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|Title Annotation:||accounting firms|
|Publication:||Journal of Accountancy|
|Date:||Apr 1, 1996|
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