A Company Audit Can Solve Your Business Loan Approval Issues

Auditing means evaluating the effectiveness of an organization's internal controls. For achieving business objectives, maintaining an effective system of internal control, getting reliable financial reporting on its operations, minimizing its cost of capital and preventing fraud with misappropriation or theft of business assets is very important. Auditors, both internal and independent contribute to your company's audit system in different but crucial ways.

How Audit Helps Small Businesses

When you apply for a business loan, then banks will see your financial accounts and the financial health of your company. If your company is already burdened with debt, low cash flows, cash crunch, then banks may cut back the amount they extend as a loan or even even refuse your request all together, Apart from this, the banks look at the amount of business capital you have put in, the revenues you have generated as well as the taxes you have paid. They will also ask you for a detailed plan on why you need this money or how you plan to utilize it. In this situation, an audit can help you as audits provide good information, and the more concrete information a bank can get, the more chances that your loan application will be approved.

Benefits Of A Financial Audit:

• Lower Interest Rates On Loans
• Better Rate Of Securing Financing
• Planning For Business Growth
• Finding Business Weaknesses To Avoid Tax Penalties In The Future

An audit provides third-party assurance that your company's financial statements are correctly prepared as well as based on verified business data. According a recent study, “Small businesses whose business documents or books are audited by a hired firm audit service in Pune, then it improves their chances of getting a loan, and at far better terms, than companies with less inspected financial statements.” Banks loves when any company has audited its financial as they reviews it as a form of insurance.

A company with less than $1 million in annual revenue can ask a audit service firm to prepare a compilation, which is a inexpensive, unaudited financial statement based on inventory, recorded sales and other data. As business owners often use these statements to manage daily operations . So, if they are prepared by Certified Public Accountant, then banks and lenders have some assurance of the statements' accuracy in deciding to approve the loan application. A small-business audit costs , depend on the size of your company, the complexity of its data or many factors.