Articulating information well such that the message can be passed effectively

through the decision making chain

Provide sufficient information so the banker understands the core cash-flow stream of your company.

Exclusive of uncontrollable events (either good, bad, or aggressive planning), what is the day-in and day-out cash-flow stream of the company?

If there is seasonality in the stream, explain this aspect well.

Operating cash-flow needs to be the primary source of repayment.

Have a good discussion about the quality of your account debtors.

Provide good information on concentrations.

Explain your process of assessing credit risk within your customer base.

This information leads to confidence in the cash-flow stream.

Provide a good understanding of the significant accounts on your balance sheet.

Talk about movements that affect cash-flow the most and how those movements are managed.

Where is the company’s equity most concentrated (benefit/risk)

Make sure assumptions are reasonable and explainable.

If the business is seasonal, provide projections on a monthly or at least quarterly basis.

A comparison to most recent year helps put the projections in context.

Draw attention to ability to repay and proper use of working capital debt.

Your banker is now more educated on the operational side of your business.

The exercise may reveal credit enhancement opportunities (i.e. SBA) that are beneficial to you (more favorable loan structure) and to the bank (mitigates credit risk).