What would a lender ask about an insulation company’s seasonal swings in crew hours?

The first thing a lender looks for is the shape of the year. Prepare hours by crew and by month, set next to revenue and payroll, so the high and low periods are visible at a glance. A lender will ask whether the dips are the same every year or have shifted, and whether any new work lines soften them.

Next comes the cash question. How does the company get through slow weeks? Show cash balances, any line of credit used and when it was repaid. Lenders are also interested in how you handle staff when work thins out: do you lay people off, cut hours or keep them busy with other tasks? That choice affects both cost and the chance of keeping skilled installers.

Finally, show the plan. Lenders like to see forward bookings, deposits and a realistic forecast of cash for the lean period. Your accountant can build the cash flow projection and explain what the lender is likely to test. If you are the buyer, ask for the same figures before signing anything. Be ready to explain overtime in the busy period as well. A lender may read heavy overtime as a sign that the business is short of people, and ask how that cost shows in margins.

Key takeaways

• Chart crew hours, revenue and payroll by month side by side.
• Show how the business covered costs in past slow periods.
• Ask your accountant for a cash flow projection through the lean season.