Financial health check: 10 questions before the bank

Quick answer. An express financial check means asking yourself 10 questions before the bank: profitability, cash, debt and repayment capacity. In half a day, with your financial statements for the last 2 to 3 years, you walk in with figures you control rather than figures you discover, which changes the whole conversation.

A bank meeting is won or lost before you enter the room. The banker does not finance an idea: they finance a business whose mechanics they understand and that they believe will repay. If you discover your own cash position or margin rate during the meeting, the signal is poor. Conversely, an owner who knows their ratios, anticipates the questions and explains the gaps inspires trust, even with an imperfect file.

This financial self-assessment checklist covers the 10 questions we review with our clients before a loan file. The aim is not to turn you into an analyst, but to give you the right reflexes so you can prepare your financing file with a head start.

A useful caveat: the ratios below are management indicators with stable definitions, but there is no universal legal threshold. When a banker mentions a debt ratio not to exceed, that is a market rule, not a regulatory obligation. So we give prudent orders of magnitude, never official standards.

Here is the sequence to run in order. Each question needs a figured, dated and explained answer.

1. Is my activity profitable? Look at operating profit and gross operating surplus (EBE). A positive, rising EBE shows the core business generates cash before financing and tax.
2. What is my real margin? Calculate gross margin, then net margin. A comfortable gross margin can hide weak profitability once structural costs are added.
3. How much cash do I really have? Distinguish net cash (available funds minus short-term bank facilities) from the bank balance shown on a given day.
4. What is my working capital requirement (BFR)? Inventory plus trade receivables minus trade payables. A BFR rising faster than turnover is a warning sign.
5. How long do my clients take to pay? Calculate the DSO. The maximum contractual payment term between businesses is 60 days from the invoice date, or 45 days end of month (article L441-10 of the commercial code).
6. Am I already in debt, and how much? Measure the debt ratio (financial debt against equity) and the state of your current commitments.
7. Can I repay a new loan? Compare your self-financing capacity (CAF) to the projected annual instalments. This is the central question for the bank.
8. Is my equity sufficient? Negative or very low equity weakens any request. The banker wants to see that the owners also have capital at stake.
9. Does my forecast hold up? Your turnover and margin assumptions must be consistent with history. A forecast disconnected from the past undermines the whole file.
10. Have I provisioned my tax and social deadlines? A late corporate tax, VAT or local business tax weighs on cash. Remember to provision corporate tax, VAT and local business tax so you are not caught out.

To go further on ongoing steering, our 5 financial steering KPIs to track cover several of these indicators in dashboard form.

The table below summarises what to calculate, how, and what the bank reads behind each figure.

These formulas are management conventions. They structure the discussion, not a regulatory report. To avoid mixing up margin levels, see how to distinguish gross margin from net contribution.

At Hayot Expertise, a firm registered with the Order of Chartered Accountants and also acting as statutory auditor, we observe one constant: the banker does not stop at the latest balance sheet. They read a trajectory. Three years of eroding margin tell a different story from an isolated, explained dip.

Our advice is therefore to present your figures over two or three years and to own the difficult years with a factual explanation. An owner who names the weak point themselves, and what they corrected, scores more than a smooth but silent file.

The most frequent trap we see among clients is confusing having cash with being profitable. A business can show a decent bank balance thanks to a supplier payment lag while losing money on its activity. The reverse exists too: a profitable company can run dry because its BFR explodes with growth.

The banker knows this gap perfectly. If you arrive saying "I have cash so everything is fine", without linking that balance to your BFR and your deadlines, you show you do not master your cycle. A 13-week cash flow plan is the tool that reveals exactly this gap, week by week.

Recently, an SME owner asked us for help before a meeting to finance a large order. On paper, the company was profitable, with rising EBE. But its clients paid at 60 days while its suppliers demanded a deposit on order: the BFR swallowed all the profitability.

In half a day of diagnosis, we figured the real DSO, isolated the financing need of the cycle and rebuilt a consistent forecast. The meeting changed in nature: it no longer asked for an endured overdraft, but for an argued working capital loan, backed by a client collection plan. The payment terms rule (60 days maximum from invoice date, article L441-10 of the commercial code) became an argument, not a fate.

Here is the operational sequence we recommend before the bank.

• Gather the financial statements for the last 2 to 3 years.
• Pull your latest bank statements and an up-to-date cash position.
• Calculate the 7 indicators in the table above, dated today.
• Prepare a forecast and a cash plan consistent with history.
• List your current commitments and the state of your tax and social deadlines.
• Write a one-page summary: why this financing, for what amount, over what term, repaid by what.

A bookkeeping tool such as Pennylane or a business bank such as Qonto makes it easier to extract up-to-date figures. For structured preparation over time, an outsourced CFO to structure steering installs these dashboards once and for all, and a solid forecast for the bank makes the request credible.

A few dated markers to keep in mind this year.

• Late payment penalties. The usual rate quoted in terms of sale equals the ECB key rate plus 10 points, i.e. 12.15 % in the first half of 2026 (beyond 30/06/2026, to be verified). A flat indemnity of 40 EUR per late invoice applies by right.
• Placing surplus cash. The Livret A pays 1.5 % gross since 1 February 2026 (order of 28 January 2026, rate to be revised on 1 August 2026). A company's financial income is taxed in the result (corporate tax), not to be confused with personal taxation.
• Corporate tax. The standard rate is 25 %, with a reduced rate of 15 % up to 42,500 EUR of profit under conditions (article 219 of the tax code). A realistic corporate tax provision protects your year-end cash.
• Electronic invoicing. Receiving electronic invoices becomes mandatory for all liable businesses on 1 September 2026; issuing follows (large companies and mid-caps in 2026, SMEs and micro-businesses in 2027). A 2026 bank file benefits from showing this project is anticipated.

The bank consults the Banque de France rating (FIBEN), a credit quality indicator. It cross-checks your financial statements against your declarations. A file consistent across the balance sheet, VAT and the forecast trajectory reassures; an unexplained gap worries. You gain by checking this consistency before the meeting rather than enduring it.

To avoid steering blind between two financial years, also track budget versus actual gaps during the year: that is exactly the kind of steering a banker likes to see in place.