Q: We recently applied for a larger credit line with our bank. The loan was approved with a number of conditions, one of which was an annual audited financial statement. I spoke with my accountant, and she tells me issuing an audited statement is extremely expensive. What are my options?
A: Audited statements require a full review of your books and records to give a clear picture of your company's financial condition. Your lender uses these statements to determine the risk involved in raising your line of credit.
I would discuss the prohibitive cost with your banker to see whether the bank would be willing to waive the condition. If your banker remains firm on the audits, you might want to shop around for a less expensive accountant. But remember, bankers like continuity, so be sure to get the bank's blessing before switching to a different accounting firm.
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