ASPN

Action-Sports Service Provider Network

Month: November, 2010

Malakye Industrial Profile of Commercial Real Estate Advisor Doug Works

Click on this link to view an interesting and informative interview that Malakye posted on their site a number of weeks ago with Doug Works, First Vice President at CBRE, life long skateboarder, Project Mercy volunteer, and ASPN founding member:

http://www.malakye.com/asp/front/CMSPage.asp?TYP_ID=1&ID=3248

Surfing China and 2nd annual China Action Sports Expo

Click on this link to view a short video about Surfing in China:

http://www.youtube.com/watch?v=4wA70hC60-4

Click on this link to read about the second annual China Action Sports Expo and Surfing China Festival, held by Wabsono International:

http://business.transworld.net/50100/features/iasc-vp-glenn-brumage-discusses-china-retail-summit/

For more information on China Action Sports Expo and Surfing China Festival, development and branding of action sports in China or Wabsono International, contact Glenn at 949-274-8467 or gbrumage@cox.net

#5 of the 10 things that you must know before renewing an existing lease or entering into a new lease

#5 – Improvements – You must know generally how you will lay out your store prior to reviewing alternatives and be aware of how tenant improvements can affect you before and after your lease expires.   

Depending on the lead time that you give yourself and the tenant improvement dollars that a landlord will be willing to provide, you may need to occupy a space in or close to its “as is” condition.   It is critical to know your desired layout prior to touring spaces so that you do not waste any time viewing alternatives that just won’t fit.   Most Landlords will repaint and recarpet your future space prior to move in, but may not contribute much more than that.  For example, if you envision a massive bowl in the back of your shop or warehouse, a) you cannot expect the landlord to pay for it, and b) if there is a restroom in the area where you envision your bowl, the restroom stays and the bowl gets much smaller or goes away.  In most cases, landlords will not pay for tenant-specific improvements such as shelving, dressing rooms or counters so it is important to budget (both money and time) for those items as well. 

In addition, should you perform or have your contractor perform your own tenant improvements, you will likely be required (per a restoration clause) to return the space to its original condition prior to receiving any portion of your security deposit after you move out.  Keep this in mind as you will need to budget for the potentially significant costs associated with that restoration as well.  This type of restoration clause can be negotiated out of the lease agreement or significantly minimized in some cases through the negotiation by a highly skilled commercial real estate advisor.

Remember to begin with the end in mind whether you are looking to lease a new space or to renew your existing lease.

 - Stay tuned for #4 in the coming weeks. 

If you have a current or upcoming commercial real estate requirement anywhere in the world, contact Doug Works of CBRE at 760-438-8591 or doug.works@cbre.com to schedule a free over-the-phone consultation.

 

What a Bank or Factor Will Need to Help Your Business Grow

No matter what stage in a company’s growth cycle, there may come a time when a line of credit or term debt will be required to continue growth or offset dips in a company’s cash flow. In today’s market some banks have tightened their lending requirements and in doing so, have made it much harder for a company to borrow needed capital.  In this market it makes sense to have all of your information ready for a bank to review in order for them to get you the working capital you need in a timely manner. The following few paragraphs will briefly discuss what important information a bank will need and how you can gather this information before hand in order to secure your company financing.

The First thing a company will need to do is locate a reputable certified public accountant or accounting firm. This is important since banks will need to review and analyze your financial statements in order to provide you with your much needed capital.  The banks have to feel comfortable that the information that they are reviewing is accurate, reliable, and presented in accordance with generally accepted accounting principles. If your company has been in business for several years a bank with typically require the prior three years of financial information. If you are a “start-up” company, the bank will require personal tax returns, an opening balance sheet and or financial statement projections with all assumptions noted. Also, depending on the size of your financing request, the bank will either need compiled financial statements, reviewed financial statements or on larger request over $7 million, audited financial statements. Some accountants will perform all three types of financial statement engagements while others will only perform financial statement reviews or audits. If you’re a fast growing company choose an accountant who can prepare at least a reviewed statement.

Furthermore, when choosing your accountant you should be mindful of their experience in your industry. In addition to their industry knowledge, you should find an accountant who is respected by the banks. Many times a bank will mitigate some risk in credit facility by leveraging the respect the bank has for the accountant. Believe it or not, they (banks) will review your accountant’s respect in the industry and they will leverage that in deciding whether or not to lend you money. Choose wisely!

Once you have selected your accountant, the bank will ask you for three years of financial statements, an interim financial statement and sometimes, especially for businesses with significant seasonality, cash flow projections. If you are being asked to provide a personal guarantee for your loan or line, you will be required to provide the banks with a personal financial statement. This document usually looks like a personal balance sheet and should act as one. If you do not have a template, your bank will have one for you to fill out.

Finally, a bank will usually ask for your accounts receivable aging and your updated inventory aging. The bank needs to figure out (particularly with asset based facilities secured by your trading assets such as accounts receivable and inventory) how much they can lend you based on your eligible receivables and inventory. I will discuss asset based credit facilities in my next article but for now I will end with a quick list of what a bank will need to review in order to approve your company for financing.

  1. 3 years financial statements and or opening balance sheet and cash flow projections (complete with balance sheets and income statements).
    • Historical financial statements should be compiled, reviewed or audited
    • Historical financial statements should always come from a reputable CPA or CPA firm with industry knowledge
  2. Accounts receivable and inventory aging reports (most recent)
  3. Personal financial statement if a personal guarantee is to be required by the bank.

Jim A. Watson
V.P. Business Development
Commercial Banking
US Bank
LM-CA-01CL
4100 Newport Place
Newport Beach, Ca. 92660

Office: 949-863-2458
Email: james.watson@usbank.com