Most businesses require funding from external providers if they are to achieve the expansion the stakeholders and directors envisage. Within the northeast there are more than 60 sources for external funding. Across the UK and internationally, a lot more.
The prime requirements when seeking funding are to know the value of your proposition and to know how much finance you need. You also need to clearly demonstrate, on a time-phased basis, how you intend to spend the funds and the revenue and net worth gains the company will achieve from the application of the finance.
Independent advice when seeking finance is essential to get the best offer for your business in a timely manner.
Preparing to Search for Finance - Key actions should include:
- Developing a Business Plan that both markets the potential of your Company and, just as importantly, the management team. It will need to present attractive and well-founded financial forecasts that will underpin business growth. Investors and funders need to believe in your products/services and that the team driving the business will deliver the forecasted results before an offer of finance will be forthcoming.
- Identifying all Finance Options - Offers for finance should be sought from more than one source – the status, requirements and ethics of a company will dictate the type of funders to approach.
Applying for Finance Offers - Key actions should include:
- Investigating all aspects of the proposed terms and conditions. Investors and funders all have their own unique terms and conditions for lending money – company managers need to understand those conditions and assure themselves that the terms and personalities suit and will fit with the ethos of the company.
- Negotiating the terms of the finance – the availability of more than one offer will help in securing more favourable terms for your Company.
Having a secure and stable relationship with your funding provider is the first aim. Establishing a relationship with a funder that can bring additional business benefits is an ideal to target in the future.
Article by Gavin R Form of Generate Ventures North LLP .
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