If you are seeking out business funding sources in order to raise capital for a new or ongoing business venture, startup, or other project you are undoubtedly passionate about your project.  Unfortunately it takes more than passion and commitment to secure financing. 

Lenders don’t care how important your project is to you on a personal level.  They care about the bottom line.  Jumbling up your presentation with emotional details or trying to pretty or sex it up will only attract funders and middlemen who may not be very reputable and will end up costing you time and money.   Legitimate lenders prefer to have bare-bones facts presented in a professional manner.

The key to creating a successful presentation is quality over quantity.  Lenders have little time to page through a hundred pages or photos of filler just to get to the facts.  A compelling, yet brief, presentation will catch their attention faster than hundreds of pretty pictures that have little to do with the bottom line of your proposal.

There are two key aspects of your proposal to a lender, the Executive Summary and the full application.  It is important to have your Executive Summary prepared before you begin your search for funding, as well as have all of the information and documentation you will need to complete a full application.

The Executive Summary:

Both the summary and application are important steps to securing your business funding, but the Executive Summary is the initial face of your project.  It is the first thing the lenders will see and will be their first determining factor in whether or not the project is of interest.  

The Executive Summary should be a brief overview of two to three pages of solid facts.  There are a few things your Executive Summary needs to have:

1.  How much money you need.  It is always best to ask for more than you need than to run out  of money mid-project.  If there is a clear potential of that happening, a lender will not  want to be involved.

2.  A brief and compelling statement of what you need the money for.  This is where you put  in the “what, where, how and why” part of your presentation.

3.  A statement of why a funder should put money behind this project.  Give a clear  projection of what payback having the funds will give to you and the project.

4.  A detailed timeframe and/or exit strategy.

5.  A statement of how you propose to service the debt.  Debt funders want security and interest.  Equity funders want larger returns and defined exits.

6.  A statement of your equity in the project and what cash you have to put into the project.  Very few lenders will fund 100% of a project.  Most look for risk and equity from the  borrower.  You are less likely to receive funding if your project is already spent-out  than you would if you have cash in the bank.

The Application:

After reviewing your Executive Summary and if your project meets the lender criteria, the lender will ask for a full application.  This will consist of more details and documentation and it is best to have it all on hand so that you are not scrambling at the last minute and keeping the lender waiting.  Here are a few questions to ask yourself before you even begin seeking out funding sources:

1.  Do you have detailed assumptions?  What are they?

2.  Have you run variations to your project model? Do you have them detailed?

3.  Is your Business Plan prepared and ready to hand over when asked for?

4.  Are your patents, plans, appraisals and permits in place?  Do you have copies or proof of all of these?

5.  Is your Financial Summary complete and available?

6.  Are your corporate bank accounts set up?  Do you have the information on these handy?

7.  Is the business properly incorporated with all registrations and fees paid up?

8.  Do you have a valid passport?

9. Do you have your personal financial information such as tax returns and financial statements up to date?  Do you have the information handy?

10. Are your corporate tax returns up to date?  Do you have copies?

Throughout the preparation of your proposal you will be highlighting the best things about you and your project.  You might think it is best to try to sweep the weaknesses under the rug and hope the lender doesn’t see them.  This is far from true.   The best thing you can do is to make a list of 5 negatives a lender might find regarding your project.  This can help you come up with solutions in advance.

The finance and funding market is not as plentiful as it was once, which means you have to fight a bit harder for your funding.  For this, preparation is the key.  Once your Executive Summary is complete, you have all of your information and documentation together, and you have a clear view of the projects negative aspects with a view of how to solve them, then you are one step closer to receiving the funding you need.

Do you need funding for a business project?

Get funding with Caribbean Land and Properties Funding and Financing Services

(c) Caribbean Land and Property April 2010