Tips on Getting Ready for Funding
Every financial institution (lender, venture capitalist, equity partner or factoring company) will have their own application and criteria for considering your business for funding whether it’s a loan, mortgage, revolving line of credit (LOC) or investment. And every type of loan represents a different level of risk so the requirements and interest rates may vary.
Some basic items are common to most of these lending/financial institutions. The following form will help you summarize your current financial situation and provides an overview that you can use when initially (informally) exploring your financial options.
In addition, you will need to assemble the following information/documents prior to meeting with a lender or financing institution.
For Start-Ups:
- Comprehensive Business Plan (the Centenary College SBDC can help you put this together). The following are the bare essentials from a business plan.
- Description of the Business
- Financial Projections
- Marketing Strategy
- Profiles of Owners and Key Employees
- Personal Tax Returns for the past 2 or 3 years for each of the owners
- List of Personal Assets
- List of Personal Financial Obligations
- Specific Licenses and permits as may be required in your industry/field.
For Existing Businesses:
- Business Plan
- Business Tax Returns for the past 2 or 3 years
- Personal Tax Returns (for the past 2 or 3 years, depending on the length of time you’ve been in business)
- You will need to provide a list of personal assets & financial obligations, if you’re in business less than 3 years.
- Business Financial Statements (Balance Sheet, Income Statement and Cash Flow)
For All Businesses:
- Amount of loan
- Date Required
- Repayment Plan
- List of available collateral & its value (business as well as personal)
- Amount of Owner Investment (equity) in the business
- Income Projections (for the next few years)
Assembling these materials only represent the starting point for your discussions with a financier. Each institution will have their own requirements, often including copies of licenses, permits, insurance policies, etc.). You will also have to pay application fees, and may have fees associated with valuation or closing costs). The lender or financier will explain these requirements when you meet with him/her.
If you need help in understanding these materials, please call us at 908-852-1400, ext. 2136 to arrange for a one-to-one consultation with one of our experienced SBDC advisors/consultants.
A partnership program with the U.S Small Business Administration. Additional funding provided by Centenary College, Hackettstown, NJ. All opinions, conclusions or recommendations expressed are those of the author(s) and do not necessarily reflect the views of the SBA.
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