1. Proof of financial and economic solvency
Accredit financial solvency It is an essential requirement for natural and legal persons who intend to obtain bank financing. Traditional banking focuses on knowing in depth the economic situation of the client before granting any loan or credit.
In any case, you should know what information to present and how to do it to reflect your real situation with complete clarity and to be able to access these products.
2. Do you need to prove your financial solvency?
Accredit financial solvency It means demonstrating your ability to deal with all your outstanding payments, regardless of when you have to face them.
It implies, therefore, that the following conditions must be met:
1.- Have the necessary resources to pay everything pending expiration.
2.- Being able to continue doing it throughoutthe time.
There are three frequent situations in which you will have to prove this solvency:
1.- Ask credits for companies or individuals en credit institutions.
2.- Contracts with the public administration. In many public projects, the presentation of guarantees is necessary to be able to access the award.
3.- Request official grants or aid.
3. How to reflect your financial solvency?
Regardless of who is the entity before which you must demonstrate this ability, it is essential to know how to do it.
Among the most used documents to prove your financial solvency, we highlight the following:
- Declaration of total billing volume over the last three years.
– Presentation of the annual accounts in the Mercantile Registry or other official record. When you do not have this obligation, it is appropriate to present the legalized accounting books.
– Justify the existence of a indemnity insurance for professional risks.
- Declaration of conformity from any financial institution.
– Realization of a qualified external audit.
– Calculation of net worth or, alternatively, of the ratio between assets and liabilities, at the close of the last financial year.
– In the case of the self-employed and individuals, presentation of the personal income tax or value added tax certificate.
– In certain calls of the administration, in addition, it is required to demonstrate that the average period of payments to suppliers does not exceed the limit set by the Treasury.
4. The support of the ratios
We recommend you to include in the documentation, the calculation of some ratios that will help you to support your proposal.
In practice, they are usually the same ones that borrowers prepare to evaluate you.
Therefore, going ahead, when the results favor your purposes, is a highly advisable option.
Here are the most important ones:
4.1. financial solvency or soundness index
El financial solvency or soundness index. It informs if the collection rights cover all the debts contracted.
Ideally, it should range between 1,5 and 2. The larger the index, the more idle resources we will have and the lower the index, the greater the risk of not being able to meet the debts.
We can differentiate them into two, according to the time horizon studied:
– Short-term solvency ratio: Current Assets / Current Liabilities
– Long-term solvency ratio: Total Assets / Total Liabilities
4.2. debt ratio
El debt ratio informs about the capacity to face the debts contracted with own resources.
The smaller it is, the more stability it will reflect.
– Debt ratio: Total Liabilities / Own Funds
In addition, the ratio debt classification It reveals the liquidity situation by dividing the current liabilities payable in the short term by the total liabilities.
– Debt classification ratio: Current Liabilities / Total Liabilities
5. What can WorkCapital do for you?
Let's be honest:
deal with these economic data, calculate favorable ratios before requesting loans or credits for companiesIt requires advanced financial knowledge.
Especially when the situation of the company is complex.
In this context, having specialized professionals will allow you to make the best decisions for your business.
En WorkCapital, we offer you alternative financing that does not depend on your economic solvency, by focusing on the payer of the credits.
In this way, your chances of obtaining financing are increased.
Unlike conventional financing vehicles, such as loans and credits for companies, we offer promissory note discount y invoice advance.
So don't hesitate:
Contact us without obligation and we will accompany you throughout the process, adapting our products to your working capital needs.
