Setting the Scene
Before considering the various forms of funding available we need to understand some fundamentals regarding the business:
Goal and Strategic Direction
What are you trying to achieve and how do you intend to achieve it.
Funders will want to know that that the new finance is required to move the business to the next Strategic Milestone consistent with the goal of the business.
If the funding is required for other purposes this needs to be clear from the outset because you are introducing new risk factors which the potential funders will need to assess.
Are you currently at or above budget / forecast expectations generating sufficient free cash to finance the new funding. Alternatively, are you expecting the anticipated improvement in the business performance due to the new funding to cover the cost of financing.
The risk profile for the funder will change depending on the perceived ability of the business to pay back the new funding.
Does the business have the resources; knowledge and experience within the Senior Team, business systems and physical assets to exploit the opportunity provided by this new funding.
Is the anticipated business expansion into the existing Total Obtainable Market or are you seeking to advance into the Serviceable Accessible Market and do you have sufficient current information on market conditions.
This scene setting will effectively narrow down the sources of available funding and enable us to focus the Funding Application on the identified audience.