Many public companies have been raising new capital to replenish their reserves following trading difficulties during the global financial crisis.
Many small/medium enterprises will also be looking to raise additional loan funds or capital to be able to exploit the expected market opportunities as trading conditions improve.
Banks are imposing financial stress testing to any new loan applications, which means SMEs need to carefully prepare loan applications. The upturn in business confidence has encouraged some Business Angels to start re-evaluating proposals for capital investments in some small/medium enterprises. If you are trying to raise a substantial loan or capital from Business Angel investors, your business application will be enhanced if the appropriate planning strategies have been implemented so as to professionalise the approach being made to potential investors or lenders.
The company has to be able to exhibit that it has developed a product/service that the market needs. You will need to be able to answer the following questions:- What problems are solved by the product/service or technology?
- How is it different from competitors’ products/services or technologies?
- What is the stage of development?
- What is the sustainable competitive advantage?
- How will the products succeed in the market?
- What testimonials can be produced from current customers?
- Is the product/service or technology already available in the market place and is there further research to be undertaken?
- Has an independent technical assessment on the product/service or technology been conducted?
- Is it a standalone product/service or technology or will it form part of a product stream?
- How is the intellectual property protected?
- What market research analysis has been undertaken?
- What is the WOW factor?
- Who are the members of the management team?
- What is the management team’s experience? It is a good idea to attach the management team’s CVs to a funding application.
- Who are the directors of the business? (especially if they are different to the management team)
There are many aspects to consider in completing applications for large loans or capital raising strategies for SMEs. If you would like to discuss this with us, please do not hesitate to contact us.