Tips For Successfully Completing a Working Capital Line of Credit Application

Sample Banner

Business owners have the opportunity to consider a working capital line of credit as a financing option to provide necessary working capital for business growth or expansion. Unfortunately, many business owners are unaware of the business financing options available to them in Canada. Then second hand applies for a working capital line of credit for their business without fully understanding the specifics of such an option.
So what are the specific requirements to be eligible for a working capital line of credit? The primary requirement is that to be eligible for the working capital line of credit; your business has to be in a sales trade or business. You must have an established account with a professional finance company that holds a valid and active role in the Canadian business and financial markets. An acceptable track record of business performance is an additional requirement to apply and receive a working capital line of credit successfully.
In order to successfully complete a working capital line of credit application, Canadian business owners need to have a business plan that shows the potential of future sales and profits for their industry. Such a plan will include an executive summary entitled “Actions the Company is Taking,” such as expansion plans, applied and recommended strategies, description of market opportunities, and forecasted targets for core performance and profit. The action plan should provide a realistic and achievable cash flow for the anticipated timeframe. It is important that the summary and plan effectively communicate and outline key performance indicators, which often include categories of headcount, production, fixed and variable costs, key transactions, key customers and their sales performance, sales growth, key keywords, and competitive environment. The summary and plan will also include the historical turn-over statistics, comparison of both historical and projections sales performance, key assumptions and risk assessments, key certification assumptions, key rate assumption assumptions, key growth assumptions, key management strategies, and key personal and business goals.
The summary will include an executive summary in which the key assumptions and risk Assumptions for the working capital line of credit are discussed. The summary must go into considerable detail regarding the categories of assumptions and risks, with specific details regarding key assumptions and assumptions. The summary should also provide key differences between the alternative financing strategies and, where appropriate, factors that require additional assumptions or modifications to those assumptions or risk assumptions.
The summary should also effectively communicate the key areas of classifying, similar business, information, collateral majority of the banking system, collateral, key customers and their respective revenues and assumptions. The summary should also include key assumptions and risks specific to each financial option. The summary should also address the impact of financing on key performance indicators, key performance targets, and key performance assumptions.
Ultimately, when adequately structured and described properly, the working capital line of credit application can provide additional cash flow to your business when most another working capital line of credit financing initiatives negatively impact the cash flow.

Sample Banner

Leave a Reply

Your email address will not be published.