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Karlene Sinclair-Robinson

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Karlene Sinclair-Robinson

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Business Owners: Why Your Financial Statements Are Important
By Karlene Sinclair-Robinson   
Rated "G" by the Author.
Last edited: Thursday, September 09, 2010
Posted: Thursday, September 09, 2010

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Proper documentation is extremely important in accessing the capital a business owner needs. Read the article and keep in mind that you cannot get funded without them.

In today's business financial market, it is important to understand what bankers and other financial sources require of business owners. When accessing capital through traditional sources such as banking institutions, they must have specific financial documents from the party seeking to borrow their funds.

If these financial documents are not in place, then there really is no way to access the financing you need for your business. Imagine what will happen if you cannot access the money you need to grow your business or for survival. What would you have to do? Lay off employees? Cancel a prominent client? Close your business? These are important questions to consider, so get it together.

You must have some of the following documents on hand to present to the funding source:

  • Current Cash Flow Statement
  • Current Balance Sheet
  • Current Profit and Loss Statement
  • Tax Returns
    • Business
    • Individual
  • Current Accounts Receivable Aging Report
  • Current Accounts Payable Aging Report
  • Bank Statements
  • Merchant Processing Statements
  • Current Client List

The above list is just a few of the applicable financial documents that a financing source can ask for. If you are unable to present them, this will certainly create a problem for you accessing capital. This is the case whether you are seeking traditional financing or using alternative funding or other private sources. These lenders have the right to ask for any documentation they feel necessary to make the transaction viable for them.

Remember, it is not “What’s in it for me”; it is “What’s in it for them”. You are the one seeking their money and though they might be more than willing to finance you, they are not willing to risk their capital when they know from the get go that you are not up to speed with your documentation.

So, for those business owners who think you can access capital by the seat of your pants that is not going to work. Make sure to have your documents in order to present when you decide to borrow other people’s money. Remember, it is their money and they are the one taking on the risk to fund you. Be sure to get it together.


Karlene Sinclair-Robinson is the author of ‘The Small Business Owner’s Guide to Alternative Funding’, and Managing Member of KPR Funding Solutions, LLC, based in Northern Virginia. She assists her clients with accessing capital and other business needs nationwide. 


Web Site: Small Business Funding Guide

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