Banking and lending · 3 min read · Published
What your bank wants to see before renewing your line of credit
By Chris Greco, Founder and President.
Before renewing a line, your banker needs three things your books may not produce: statements that tie to the tax return, a balance sheet where every account reconciles, and the covenant calculated the way the loan agreement defines it. Everything else is paperwork.
The analyst's first move is to lay your internal year-end next to the return. A $70k difference with no bridge becomes a question, then a condition, then a delay. The second move is the balance sheet: undeposited funds, a loan balance that does not match the lender's, payroll liabilities that do not match the filings.
Build the bridge once and keep it. Reconcile every balance sheet account monthly. Calculate the covenant quarterly, before the bank does. Renewal becomes a calendar item instead of a fire drill.
Where this applies
Chris Greco
Founder and President, CFO Anywhere. CFO for owner-led companies since 2002. Executive MBA, Gies College of Business, University of Illinois.
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