Will Your Business be Able to Get a Bank Loan?

After reading Article #1 titled "Is Your Business Owed Money?" in my series of "Recover Your Business Profits" blog posts, your business should have concluded to use a third party which is a profit recovery company to free up those profits which are tied up in late past due accounts receivable.


A critical question that must be asked if your business is not using any third party to help with collection is, "Will your business be able to get a bank loan?"

The facts speak loudly that if only internal collection efforts occur, whether the business clients are B2B or B2C, inevitable late past due accounts receivable will occur and drive extended days sales outstanding (DSO) resulting in required standard accounting procedure write-offs.

As tax time arrives, the IRS may question and even audit a business to make sure that write-offs are truly above board and justified. The IRS will want to insure that goods or services were not supplied to friends and/or family for free and for personal gain while the business writes them off and avoids paying taxes on the income. Issuing 1099’s to delinquent debtors helps avoid ethical inquiry from the IRS (and forces debtor tax payment on the “charitable” income) but so does having a third party profit recovery company on contract with evidence of a valid documented attempt to collect from each written off debtor.

Even though the chances of an IRS audit can be virtually squelched with the above approaches, write-offs after this can still have great negative impact on the business! Why? Because of what banks call a “non-performing asset” otherwise known as “written-off A/R or DSO”!

You may ask, “So what if I have a uncollected debt which is written off as a non-performing asset? Well, in this economy with extremely tightened credit being offered from banks to businesses, you definitely do not want to have an inability to get credit to expand the business or to cover cash flow fluctuations. It could be the difference between flourishing and going bankrupt.

The fact of the matter is that banks look closely at non-performing assets (debt write-offs) as a key criteria to determine whether a loan will be granted or not.

Do not strap your business for cash by not taking full advantage of a profit recovery company to avoid or minimize unpaid client A/R based write-offs!


To inquire about how you can keep your business financial standing high enough to acquire needed bank loans by working with a profit recovery company that has an average 56% recovery rate in 40 days for accounts turned over before they exceed 90 days late and doing so for a flat @$10 fee per debtor account,

call us at:

818-710-0244


Series: "Recover Your Business Profits"
Article: #10 "Will Your Business be Able to Get a Bank Loan?"