If you're about to finance a new fire truck - whether by lease purchase, loan, or bond - it helps to know what to expect.
It can be daunting to wade into a world you don't know. We'll help you be prepared for the financing experience.
Here's what to expect #2 - You should understand your financial informationWhen a bank reviews your financial information, they will try to determine what is normal. So, they'll try to back out any unusual or non-recurring revenues or expenses.
So, be prepared to explain what is normal and recurring and unusual and non-recurring.
These types of items are generally non-recurring.Grants, loans, large unusual donations, and insurance claims are examples of non-recurring revenues. These are revenues you won't receive each year.
Grant expenses, large one-time purchases or repairs, and payments on repaid loans are examples of non-recurring expenses. These expenses are not typically incurred each year.
SummaryIt's important to have someone who understands what is normal and what is unique financially with your department's recent history. It will help a bank perform a quality repayment analysis when they are confident in your knowledge of your department's financial statements.
John R. Hill