The document is a presentation on business lines of credit that includes definitions, types, how to obtain one, and ways they can be used. It also includes a case study about a business owner wanting to sell her business and the steps taken to prepare, including normalizing financial statements, addressing tax issues across multiple states, and obtaining an objective valuation.

1. ME
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p a s s w o r d
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06/29/2022
reminder:
• presentation

2. ME
[Group 5]
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What is business line credit
What types of business lines of credit are there?
How to Get a Business Line of Credit?
How is a line of credit different from a term loan?
How can I use a business line of credit?
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Roman, Gerald
Antonio, Shaira
Sevilla, Renz
Marie
Gaon, Roselyn
Dolorpo, Rhiza
Mae
Cuevas, Regille
Cuajao, Brook
Shiell

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A business line of credit is flexible, revolving capital
that gives you access to cash
What is a
business line
of credit?
back
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There are two kinds of line of credit
SECURED
A secured line of credit is guaranteed by collateral, such
as home.
UNSECURED
An unsecured line of credit is not guaranteed by any
asset or collateral one example is credit card.
What types of
business lines
of credit are
there?
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 The process to obtain a secured line of credit may take longer
than the process for an unsecured line, because your assets may
need to be verified and appraised as a source of repayment.
 Whether or not your line of credit is secured or unsecured also
May affect the amount of money that you have access to and the
interest rate that you are charged.
 If you’re interested in how to get a business line of credit, you’ll
need to talk to your lending institution to determine what a
secured or unsecured line would look like for your business and
what materials you will need to provide for the application.
 The requirements and repayment terms can differ among
lending institutions and online lenders.
How to Get a
Business Line
of Credit?
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The line of credit is a predetermined borrowing amount
that may be used whenever needed, repaid, and
borrowed from again. An loan is granted in response to
a borrower's particular need, such as funding for a home
or automobile purchase. Credit lines are available to be
used for anything.
How is a line of
credit different
from a term
loan?
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There are a number of ways you might use a business
line of credit. Some of that depends on how large your
line is. But you also want to take into consideration how
quickly you can pay off your line of credit.
How can I
use a business
line of credit?
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Case Study: Adding Value in a Business Transaction.
Introduction:
 After buying a business, it is in the new owners’ best interest to start thinking of
ways they can add value to the business which can be implemented over time.
How you will adding value to a business you intend to buy is one of the
questions you need to ask yourself when buying a business. There is not just
one method to add value to a small business that you intend to purchase, there
are many. Depending on your business, there are numerous ways to improve the
performance and ultimately the profitability of the business. As the new owner
shouldn’t make too many changes too quickly as the transition period can
already be a difficult period for employees and changing too much too quickly
at once can be confusing and cause the loss of clientele or key employees.
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Issue:
One of our clients let’s call her Yvonne was ready to sell her
business. At the age of 40, she wasn’t going to retire, per se, but
she was ready for this chapter to come to a close. Yvonne had
built a wildly successful business: a firm in the retail services
industry with $2 million EBITDA, $8 million in annual revenue,
35% annual growth, and high profit margins
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Case Study: Adding Value in a Business Transaction.

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Problem:
In our early discussions about the sale, she posed the following
questions to us:
1. How do I best prepare and position myself in the
marketplace?
2. My company has assets in all 50 states is that going to be a
factor during the sale?
3. How do I even begin to figure out how much my business is
worth?
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Case Study: Adding Value in a Business Transaction.

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Case Study: Adding Value in a Business Transaction.
Solution:
1. Yvonne’s first concern was how to best position her
company in the marketplace and attract the best buyers. Her
small business did not have CPA-prepared financial statements,
so that’s where we started. Our team prepared a quality of
earnings report that identified issues in Yvonne’s current
accounting as well as normalization adjustments that should be
made to her financials.
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Case Study: Adding Value in a Business Transaction.
2. Yvonne’s company had assets in all 50 states, so we
enlisted the help of our in-house State & Local Tax (SALT)
experts to get ahead of any complications. We’ve seen time and
time again that one of the biggest deal-killers in business
transactions is a state tax-related issue that arises during the due
diligence phase.
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Case Study: Adding Value in a Business Transaction.
3. To help Yvonne put a price tag on her lucrative business,
we consulted our business valuation partners. Business valuation
is a crucial component of the sales lifecycle; Yvonne needed to
know the approximate value she could expect from selling her
business before she was willing to move forward with a
transaction. Yvonne, as a small business owner, didn’t have the
help of an investment banker or broker at this stage, and she
wanted to ensure that she got a valuation from an objective
standpoint.
back

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