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  #1  
Old 08-06-2014, 09:52 AM
aesix217 aesix217 is offline
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Default My Company's Growing Pains

Hello friends, I have a question that I'd assume is fairly common.

My company is two years old now. It has been entirely financed by its two owners who have been able to put a significant amount of capital into it, which I have in turn put to use.

I lease very large and expensive industrial equipment to other businesses which has left me with a very high amount of depreciation, forcing my net income into the negative. I am now faced with a need for a line of credit as I have used all available capital, and despite having great success the numbers aren't what a bank would like (such as a 1.2x debt service ratio).

How would you address this problem?
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Old 08-11-2014, 06:51 AM
Venetia Rose Venetia Rose is offline
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Default Re: My Company's Growing Pains

In today's world, any business would like to go ahead and reap success not only monetary wise but also brand wise. Consult some good financial management advisory council like KPMG and hit your target.
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Old 08-26-2014, 09:11 AM
Pedrots Pedrots is offline
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Default Re: My Company's Growing Pains

How are you calculating the 1.2 d/e ratio?

Also, if your cashflow generation is solid and you have fixed assets as guaranty for your loan, I don't see a problem.

Have you tried calculating ebitda/interest expenses ratio? this coverage is really useful to state the ability of a companie to meet its obligations (assuming that you will roll debt)
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