Increased Line of Credit

Challenge: An expanding international distribution company needed an increase in their line of credit; however, financial institutions were struggling to understand the financial information provided by the company which was their income statement and balance sheet exported directly from their accounting software.


Signature Analytics’ Solution:


Prepared a Quality of Earnings report to simplify the company’s financials. This robust financial information package interpreted the results of the operations. The report included tables and charts, along with a discussion of trends and unusual items, to help the reader (i.e., financial institutions) better understand the business’s performance.

Indicated expenses that were one-time charges. Through discussions with the company’s management, we identified one-time expenses which were not expected to be incurred in the future. These expenses were “added back” to the net income and earnings before interest, taxes, depreciation, and amortization (EBITDA) in order to determine the normalized results of the company.

Adjusted EBITDA to reflect one-time expenses. This is a calculation that many investors and lenders use to evaluate a business; however, it had been difficult to calculate with the financial information previously provided by management. So we included the adjusted EBITDA calculation in the report.

Included graphs and charts to clearly communicate results. This helped articulate trending and overall business performance for the reader, as opposed to simply providing the balance sheet and income statement.

ROI: Increased Line of Credit by 20%

Presenting the company’s financial information in this manner allowed the banks to clearly understand the data and made them more comfortable with the business’s performance. This led to the company obtaining a 20% increase in their line of credit and an improved relationship with the bank.

Best Practices for Increasing your Line of Credit

  • Build credibility with banks by presenting financials in a professional manner that they will understand.
  • Interpret the financial information for the investor or lender as opposed to allowing them to develop their own conclusions. Since management knows the business better than the reader, it is important that the results of operations be explained thoroughly.
  • Don’t show too much or too little financial information. Voluminous information will likely go unread. While not providing enough information can result in the investor or lender making incorrect assumptions about the business.
  • Present financial information that represents the company in the most positive light.
  • Anticipate and address the bank’s questions upfront.

The Persuader Version 2.4