09/15/2026
When applying for financing, most business owners focus on increasing revenue and profits. While those things matter, there is another factor that is often overlooked: making your financial statements easy for a lender to understand. Lenders review many files. The less time they need to spend deciphering your financial statements, the easier it is for them to identify the strengths of your business. Here are two simple ways to improve the presentation of your financial statements before approaching a lender.
1. Put Accounts in the right Balance Sheet section.
It sounds obvious, but many bookkeeping files contain negative liabilities that are actually assets, or negative assets that are actually debts. A common example is a bank account in a negative balance, which usually means a Line of Credit is being drawn down.
Instead of leaving them as negative liabilities or negative assets, reclassify them to the appropriate account on the other side of the balance sheet. This makes your balance sheet easier to read and reduces confusion.
2. Separate Shareholder and Business Transactions
Large shareholder loan balances with numerous personal transactions flowing through them can make lenders nervous. Keep personal and business transactions separate whenever possible and ensure shareholder loan accounts are properly reconciled and explained.
