Masonry Magazine April 2003 Page. 33
The Masonry Showcase
The Masonry Showcase got you interested in owning the latest masonry equipment? Discover the smart way to get the loans you need to finance the equipment you want.
WITH THE COUNTRY IN A RECESSIONARY MODE and consumer confidence dropping, banks and lenders are being extremely cautious. Those companies in the construction industry, however, have continued to be a bright spot, experiencing continuing strong demand and profitability. Therefore, most mason company owners and suppliers are going to be well received at banks and non-bank lending companies. Interest rates on borrowing generally are based on the "prime rate," the best rates offered by major banks to their most credit-worthy customers, which (at press time) is currently 4.25 percent at most banks. Therefore, prime plus one percent floating would be 5.25 percent and prime plus two percent equals 6.25. Commercial mortgage rates have been higher, generally from 5.5 percent for the best clients to 6.5 percent and even seven percent for riskier projects as determined by the banks. This, then, is the current environment: favorable rates, but cautious lenders.
Strategies for Approaching Lenders
HOW SHOULD YOU go about getting yourself ready to approach your local bank or regional office of a national lender? First, you want to have your tax returns and operating results structured to show the history of your business over the past three years, on its best footing. Very often, the way your accountant did your tax return is not going to make your business attractive to a lender. Typically, separate company financial statements should be structured on an accrual basis, with Gross Revenue identifying
The Voice of the Mason Contractor
April 2003
Masonry 31