Funding Request
The purpose of the funding request section, as its name implies, is to state the amount of funding you will need to start or expand your business. If necessary, you can include different funding scenarios, such as a best and worst case scenarios, but remember that later, in the financial section, you must be able to back up these requests and scenarios with corresponding financial statements.
You will want to include the following:
- Your current funding requirements and your future funding requirements over the next five years. Be sure to include the specific amounts, the time period that each request will cover, the type of funding you're requesting (e.g. equity, debt), and the terms.
- How you will use the funds you receive. Is the funding request for capital expenditures, working capital, debt retirement, acquisitions? This information is very important to a creditor.
- Planned long-range financial strategies that could impact your funding request. For example, do you plan on going public with your company, having a leveraged buyout, being acquired by another company? How will you service your debt, and do you plan to sell your business in the future? Any of these plans will directly impact your ability to repay your loan(s).
For more in-depth coverage of this topic, click here to jump to the Finance page.
References:
• Small Business Administration
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