Credit Crunch Help is Available!

We have recently been contacted by many of our clients regarding the banking crisis, even though the FDIC insurance limit has increased to $250,000. We can provide a resource that will allow you to research your bank’s rating, as many of our clients have more than $250,000 in their accounts on any given day.

Our clients have also consulted with us regarding their cash flow crunch because of their inability to collect from customers they have billed, and the general worry about whether additional financing is available from their existing bank, and whether their loan might be called by their bank.

We continue to discuss with our clients ideas we feel they should consider. A very important feature of our planning is advising our clients to maintain at least two banking relationships in case their primary lending source decides, for whatever reason, to make fewer loans or to loan out the same amount but to fewer customers. You do not necessarily need to maintain accounts in two different banks, but you should at least know other bankers in case your loan officer leaves or the bank decides that you are no longer one of their favorites.

Another step we recommend is to always apply for the financing you might need in advance of actually needing the funds. If you want to increase your line of credit amount in the future, apply for the increase in advance to see whether the banking climate has changed, and to allow sufficient time for the increase to be approved. If you want a home equity loan on your house to help provide funds for the Company if times get tough, apply for that home equity loan (no cost equity loans are still available) now to see what amount you will be able to borrow. The lending climate has changed for personal residences, with lower appraisals being the norm, as is the percentage of the equity that is available to be borrowed.

There are additional alternatives to improving cash flow:

• Accelerate your collection efforts
• Pay your vendors a little slower than you have previously
• Consider a separate line of credit for purchases of equipment which would eventually be converted into an installment arrangement
• Obtain a second mortgage on the building you own and rent to the Company, regardless of whether you own the building inside the corporate shell or own the building personally or in an LLC
• Factor your receivables
• Sell unencumbered equipment and lease it back from a leasing Company.

If any of these ideas seem like avenues you may wish or need to pursue and want our help, please call us. Our experience in these fields is certain to benefit you