What is retained earnings: Retained earnings refer to the percentage of net earnings not paid out as dividends, but retained by the company to be reinvested in it’s core business. It is recorded under shareholders equity on the balance sheet.
It’s not cash: Fundamentally retained earnings does not imply that there is cash available, it means that that there is an accumulation of value. It is a running total of all the earnings the company has held onto over the years.
What is the opportunity: The opportunity works well in the BHPH business and can be pointed in a variety of directions. Since you have a portfolio and you control the originations going in, and the expenses of your operation, you are also able to control the run off of cash from that portfolio subject to staying within the covenants of any lender you may have. Many BHPH dealers may be able to fund a succession, pull out some extra cash, or possibly pay down debt. This can be powerful tool.
What should you do: You should discuss these possibilities with you qualified accounting resource. They can advise you on your particular situation. Remember for for many this could be hundreds of thousands or even millions of dollars.