Challenge:
A construction company seeking a loan had a poor initial appraisal by the lender resulting in a much lower percentage available to borrow.
How LWG helped:
When we reviewed their figures, we discovered that while the company would lease out equipment on a six-month term, the lease would be extended on average up to 70% longer, since construction projects are prone to time delays and exceeding initial budgets. Based on the company’s history, we were able to prove over a 20-year period that leases extended on average 70% longer which resulted in increased revenue for the client above the value of a six-month lease.
Outcome:
With these new findings presented to the bank, LWG proved that given the history of their leasing program, the bank approved a higher amount.
Summary:
The conversation with our client revealed their challenges with the borrowing process. We immediately began to assess all areas of the company’s operation. We found that the extension of their leases resulted in additional revenue that was not originally considered during the initial appraisal. We were able to identify an additional asset the company didn’t know they had.
While frequent audits can reveal a business’ growth or loss, we look at the big picture and often find sources of revenue or additional assets that may not be obvious.