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Being prepared helps the funding process move quickly and smoothly.
Whether you need just a small amount of startup capital or a larger amount, if you are contemplating asking for funds from any traditional source such as a bank or even an investment group, there are some items you'll want to have in order so as to put your proposal in the best light possible.
Let's examine some now, and you decide if they are applicable to your situation.
You'll need to have the answers to the following questions either on paper or at the tip of your tongue. (Preferably on paper!)
- What is the purpose of these funds? Are they for seed money, working capital, growth capital or equity investment?
- Exactly how much are you asking for?
- How will it be repaid?
- What is your time frame?
- How will you generate funds for repayment?
- If applicable, what collateral can be offered?
- What personal guarantees are you willing to offer?
Beyond this, a sound business plan will be essential for most all forms of public financing.
You may be able to get by without one for some private placements, or if you're tapping personal funds, but otherwise plan on making one.
A good business plan will be a great tool for convincing lenders that you not only know whereof you speak, but will demonstrate to them your business acumen and management skills.
By coming up with an analytical, objective and well thought-out business plan, this will show those who have the money you are seeking that you are a cautious, capable and conservative businessperson, and are unlikely to fritter their money away.
On the flip side, if you turn in a poorly researched and flimsy business plan, containing extravagant and unsupported income projections, you will be likely to be not taken seriously.
Have your financials ready to be seen
If a credit report will be taken, it is wise to order one for yourself before you send one out into the funding world. You wouldn't want any surprises to come along at this point.
Having a sound business plan and your financial information in place beforehand will make the process go a lot faster as well. Roughly 80% of proposals are rejected because of incomplete or missing items in the application process.
If you do not feel comfortable doing these yourself, by all means get some help. It is too important to risk failing at!
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Your Business Financing Options |
