Every business owner (and banker) knows that money is important. But it becomes even more important when you don’t have any. That’s where the paradox comes in: The people who don’t need money can get it easily, while the ones who need it can’t get any. Or so it seems.
Your banker needs to know that you can handle the money you already have. As his customer, your job is to prove that you know how to manage your money and that you’ll be a good steward of the money the bank loans you. To do that, you’ll have to get your finances in order and make sure that the paperwork is ready for your banker’s eagle eye. You simply can’t afford to have bad nums. And there’s a lot more to doing that than simply filling out loan papers.

Lesson No. 1 – Sprucing Up Your Finances

Ron: You always want to make sure that your financial statements look their best before you go see the banker. That’s a huge mistake people make.
One way to do that is by compiling all your financial statements. People don’t realize how many different kinds of financial statements there are.

Greg: There are four kinds of corporate financial statements that people need to know about:

• Internal: This is one you keep running indefinitely.
  It’s internally prepared.
• Compilation: This is when your accountant basically puts
  your internally prepared figures on their letterhead.

 

Bad num – A bad or inaccurate number, usually in a business plan or other document. The number is either wrong or distrusted in some way.
Use: “Theresa’s model included many bad nums, so she was told to
study her data for errors.”