Make a Statement
What to do if your bank requires audited financial statements
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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Write to Doug Hood, founder and president of Rainmaker
Capital Corp, at doughood@rainmakercapital.com