Money is the lifeline of any business, so regardless of if you’re starting out or running an existing business, securing finance is important – especially for small businesses.
Before you approach a lender or investor, make sure you and your business are in the best position to seek finance.
Prepare and plan
Your business plan should be considered, well researched and concise. The plan needs to include the right type of detail to motivate a lender or investor to finance your business.
Make sure your plan includes at a minimum:
- An executive summary – some people don’t want to read the whole thing
- Owners and key personnel qualifications and experience
- Financial data, including capital required and how it will be spent
- Market analysis, including risks and any negative aspects
Crunch the numbers
Know your key financial figures. Including:
- Current income
- Net profit
- Future projections
If you don’t know these numbers, speak to your accountant so they can prepare what you need to know.
Know your limit
Before you visit a lender, work out your limitations for finance. Consider the following:
- Do you need the money up-front or on a needs basis?
- What is the maximum repayment you can afford?
- How much equity do you have?
- What is the maximum percentage share of your business you are willing to offer investors?
Do your shopping
Finance is competitive. Shop around and find the best product for your situation. Most people go straight to their bank and although there can be discounts for existing customers, you may find a cheaper option with flexible terms elsewhere.
Check the details
If you find a cheaper finance option investigate and find out why it’s cheaper. Run your options past your accountant before signing anything.
Not sure where to start?
Talk to us and arrange a consultation.
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