BRAVE’S Liz Gjoni offers some tips on how to secure start-up finance for your new business venture.
Sadly many aspiring entrepreneurs with good business ideas remain just that – aspiring.
That’s often because they fail to secure the funding they need to get their venture off the ground.
But there are things you can do to make yourself more attractive to potential lenders and investors, not least of which is convincing them that you have a viable business idea.
Whether you’re applying for a bank loan, business grant, equity investment or crowd funding, potential backers look for a number of qualities when assessing you and your business. Following the CAMPARI acronym can help you convince them to part with the finance you need. This is how many fund managers evaluate a loan.
- C stands for Character. Do you have what it takes to run a successful business? Do you come across as confident and businesslike? Prepare thoroughly before meeting lenders to avoid any Dragons’ Den-style meltdowns.
- Do you have the Ability to make it happen? Potential backers will want to know you have the necessary skills, knowledge and experience to build a profitable venture. Are your products or services good enough?
- M is for Margin – which means you need to show that you are capable of delivering sufficient profits – and P is for Purpose. What exactly do you need the money for? Is it to buy essential equipment for example? How will it help the business succeed?
- You also need to be clear about the Amount you want to borrow and explain how you have arrived at that specific figure. Will it be enough to achieve your stated aims?
- R is for Repayment. Potential backers need to feel confident that you’ll be able to repay the loan, so impress them with your cash flow forecasts and profit projections.
- Lastly, what Insurance or security can you offer in case things go pear-shaped? What are you prepared to lose? Your home or other assets?
Lenders may also want to check your financial track record. If you have a poor credit history, for example, it might be worth delaying things for a few months while you repair the damage.
The good news is that there’s expert help available locally, especially if you’ve been turned down by traditional lenders.
You could consider the government-backed Start-up Loans scheme for example, which provides loans to small businesses and start-ups that are unable to raise sufficient funds from their bank.
With a fixed interest rate of just 6% per annum and the ability to borrow between £500 and £25,000, the start-up loans offer an affordable source of finance to help new and early stage businesses. You can find out more at www.startuploans.co.uk
BRAVE also runs a series of workshops to help people thinking about starting a new venture and those who are ready to launch or grow their business. BRAVE can assist you with putting together a professional business plan to help you secure the finance you need.
Please see below for more information on forthcoming workshops at BRAVE or phone 0117 944 5330 for details about the range of business support on offer.