Finance Blog
Business Plans - do's and don'ts
Written by Larry Johnson Friday, 06 November 2009 16:29
A business plan is a mission, vision and values document. It is often written to start a new business or get funding for an existing business that is changing in some significant way. It documents the strategy, tactics and plans for the business and seeks to convince potential investors such as banks or private individuals who may decide to fund the business or its expansion.
A Closer Look at Financial Statements
Written by Larry Johnson Friday, 06 November 2009 16:23
There are three levels of Financial Statements. From highest to lowest value, they are: Audited Statements, Review Engagement (RE) and Notice to Reader.
At the high end, Audited Statements can be expensive. However, they are rarely required by lenders. At the lower end, lenders are very sceptical of the Notice to Reader financials. This is because the accountant often merely produces numbers requested of him by the client with very few, if any, checks on the validity or accuracy of the information. Review Engagement statements are the appropriate level for our clients.
BFA, Banks and Risk Tolerance
Written by Larry Johnson Sunday, 01 November 2009 19:00
How does BFA differ from the banks vis--vis risk tolerance? For starters, banks are traditionally risk adverse. Banks will not often lend where their risk assessment of the project would require a rate of more than prime plus 2%. Consequently, their criterion for what constitutes a good lending risk is narrow and often restrictive.
Broadcast Financing
Written by Larry Johnson Sunday, 25 October 2009 19:00
No, BFA is not financing the local radio station; were talking about a way some businesses approach their financing requirements. Since many businesses find the process of financing confusing, frustrating and mysterious, it comes as no surprise that they hold the mistaken belief that the more their case is out there the better chance there is for financing. But broadcasting a case often does more harm than good. Heres why.
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