Basic Financial Package

Almost all investors and lenders want to see similar financial documents. By preparing a basic financial package, and ideally, keeping it up-to-date, you'll be in a better position to act quickly on financing opportunities. There are two levels of financial documents to prepare, the basic documents needed for most financial activities, and additional documents needed, especially for large loans or investments.

What Needs to be in Your "Basic Financial Package"

Basic Company Financial Documents:
(needed for virtually all financing opportunities, whether a loan or investment)

• Balance sheet. Financial report that shows the status of a company's assets, liabilities and owners' equity; this gives a complete picture of the worth of a company.

• Income Statement, also called Profit-and-Loss Statement. Summary of a company's revenues, costs and expenses during one accounting period. This shows how profitable a company is. If a company is new, these can be projected income statements.

• Cash flow projections. Estimates of the schedule on which money will actually move into and out of your company. Cash flow can be very different than income statements, especially for companies that operate on an accrual basis accounting.

Additional Financial Information
Certain financial activities will require greater information.

Such information may include:

• Audited financial statements. Financial documents like those listed above, but prepared by an accounting firm that audits the documents to make certain they are correct.

• Last two-three years' business tax returns.

• Last two-three years' partners' and owners' personal tax returns.

• List of current accounts.

• Current business plan.

• Appraisals of assets that secure loans. Appraisals are estimates of the value of property, made by an expert.

• List of other personal assets and liabilities of the partners/owners.

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