The Fundraising Process
PHASE 1: Identify a need for finance and put plans in place
- Establish or review key objectives of the Business. This may identify the need for external finance be it for working capital, expansion of the Business or purchase of new assets
- Ensure monthly management accounts are up to date with relevant management information to ensure the Business is ‘investment ready’
- Seek an advisor, mentor or coach to review strategic options and support through the funding process
PHASE 2: Writing a Business Plan
- Prepare a detailed report about the Business, both background performance and future plans. This is a helpful business tool to document thoughts and directions, as well as an essential stage of applying for funding
- This should answer key questions for potential funders namely how much is required, why and when the funding is needed, together with which type of funding e.g. debt funding from a bank or equity investment such as Business Angel
- The plan should highlight key risk areas and demonstrate how they will be addressed
- Financial forecasts will be required to demonstrate growth and/ or affordability to repay any loans or generate returns for investors.
PHASE 3: Approach to funders and review of options
- Selection of funders will depend on a number of criteria including size of business, funding amount, fees and rates, investment term and type, business sector and business location
- You will need to present a Business Plan and required supporting information such as your latest accounts and your cash-flow forecast
- The choice may be a mix of finance types and/or providers
- Please refer to our "Useful Information” page for advice on the completion of Business Plans, example Business Plans for a range of businesses and a suggested Business Plan and cash-flow template.
PHASE 4: Due diligence, secure funding and on-going review
- Funders are likely to test and review key assumptions of the Business Plan and forecasts to assess risk of repayment.
- If your application is declined, request feedback, seek advice and review business objectives before returning to Phase 1
- Once secured, on going review of financial performance is required to ensure compliance with key terms and conditions of the funding