Step 4: Make the Pitch to the Right Financing Source
One of the biggest mistakes business owners make is applying to the wrong lender.
DO NOT APPLY FOR FUNDING FROM MULTIPLE LENDERS, VENDORS, CREDITORS, OR EQUITY PARTNERS WITHOUT FIRST KNOWING THEIR UNDERWRITING OR DECISION- MAKING CRITERIA.
If you don't know what their underwriting criteria are, then ask them before you make your pitch.
By going through the first three steps recommended here, you will have the information you need to determine what sources are the best fit for your situation and you will have the documentation you need to apply or ask for funding. Remember, if you are looking for equity whether it be from family, friends, angel investors, or venture capitalist, they will invest in YOU first and your company or business idea second, so make sure you can show you are worthy of their investment. If you are applying for a loan, show that you either have the cash flow to pay back the loan or the collateral to secure the loan. Click Here for a loan application checklist.
The most important thing is to be prepared, know what and how you are asking and whether their are milestones that you can present that will show your financing source you are on target.
Finally, remember that it may be necessary to seek financing from multiple funding sources. For example, by combining crowd-funding with unsecured business financing and vendor financing, this might allow you to amass the required amount of funding that you need for you venture. However, make certain that you are not seeking funds from mutually exclusive sources. For example, getting a SBA-guaranteed business loan will prevent you from factoring your accounts receivables because the SBA will put a lien on all your business (and possible personal) assets.
If you need help identifying what sources are the right sources for your business, consider investing in our financing consulting services. You will save time, you will save money, and increase your chances of getting financing 100 fold.
DO NOT APPLY FOR FUNDING FROM MULTIPLE LENDERS, VENDORS, CREDITORS, OR EQUITY PARTNERS WITHOUT FIRST KNOWING THEIR UNDERWRITING OR DECISION- MAKING CRITERIA.
If you don't know what their underwriting criteria are, then ask them before you make your pitch.
By going through the first three steps recommended here, you will have the information you need to determine what sources are the best fit for your situation and you will have the documentation you need to apply or ask for funding. Remember, if you are looking for equity whether it be from family, friends, angel investors, or venture capitalist, they will invest in YOU first and your company or business idea second, so make sure you can show you are worthy of their investment. If you are applying for a loan, show that you either have the cash flow to pay back the loan or the collateral to secure the loan. Click Here for a loan application checklist.
The most important thing is to be prepared, know what and how you are asking and whether their are milestones that you can present that will show your financing source you are on target.
Finally, remember that it may be necessary to seek financing from multiple funding sources. For example, by combining crowd-funding with unsecured business financing and vendor financing, this might allow you to amass the required amount of funding that you need for you venture. However, make certain that you are not seeking funds from mutually exclusive sources. For example, getting a SBA-guaranteed business loan will prevent you from factoring your accounts receivables because the SBA will put a lien on all your business (and possible personal) assets.
If you need help identifying what sources are the right sources for your business, consider investing in our financing consulting services. You will save time, you will save money, and increase your chances of getting financing 100 fold.