Most of us are reading about the credit crunch that is coming. For the most part, this only pertains to a small segment of the market…mostly sub-prime individuals (meaning less than good credit individuals, not less than the Prime rate borrowers). For the businesses that are credit worthy, there is plenty of credit available at very attractive rates. Is your company credit worthy? Well generally, good credit companies have a history of positive cash flow and earnings (although some fluctuation is understandable depending on the industry), and the company has built a strong net worth relative to liabilities. The Liabilities to Tangible Net Worth ratio is looked at by many commercial bankers as a strong indicator of a companies long term financial health.

Company owners should talk to their CPA and bankers reviewing their financial statements to first ensure the financial health of the company and second, to take advantage of market opportunity when available. If your company does not have a good net worth position and little net worth, then talk to your professionals to help you get to that point. Often small changes in strategy or operations can make big differences in results. Contact Michael Moran at 312-492-1104, or mmoran@americanchartered with questions.

This entry was posted on Tuesday, September 18th, 2007 at 9:34 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.