ForumsFinancing Tips

Hi Teaze,

How much do you need and what's your cash flow situation? The easiest way to assess your cash flows is to get your 2007 tax returns and take Net Income + interest expense + Depreciation/Amortization + Rent (only if you own your building and you are paying yourself the rent). Then take all your monthly debt payments and add them up, (don't forget to include what the payment on the new loan would be) and multiply times 12. Then take your cash flow number and divide it by your total annual debt payments. This number should be no less than 1.25. You should also do the same exercise on your Year-to-date P&L.

If the business isn't generating cash flows to cover your debts by 1.25 times, its going to be tough to find a loan if your credit is fair. The only possibility in that case would be if you had some collateral (stocks, bonds, or real estate).

I hope that helps! If you are having trouble with the dent service calculation, e-mail me and I can walk you through it.

do you have a business plan?

I know some investors who would be interested in your company for funding.

loanguy@walkerlender.com