Before you seek external finance, you need to work out what is realistic in terms of amount, the timescale and the factors that will affect these calculations. Backers expect you to arrive at the sum you seek through careful planning and rigorous research. Fundamentally, they want to know what it is for, how long it will last and when you will provide returns.

It is important to be realistic for the stage of development your business is at. For most companies funding levels tend to rise incrementally from small amounts of debt, to more sophisticated facilities (such as invoice finance and leasing), to angel, venture capital and public market funding. Think about:

  • How financial institutions view your sector
  • Your management team’s track record
  • Existing and potential future competitors, and the economic climate
  • Your existing debt facilities – the difference between what expansion capital you think you need plus everyday overheads as you grow, and the availability of your existing facility
  • Your asset backing – any assets you can use as security with investors or lenders
  • Vision – it’s important to have a clearly defined goals and ambitions for your business

How much money do you need

You will need to cost each aspect of your start up plan or growth strategy. For acquisitions it helps if you have identified potential targets and valued the business. To launch a product or service you will need a marketing plan, which includes:

  • Who you will target
  • Assumptions about how many sales or customers you hope to acquire,
  • The medium you intend to use
  • The cost of the campaign

New premises will require some assessment of the cost to buy or rent in the area you plan to locate, as well as any modifications you will make. If it is working capital you are require, you will need to assess the cost of hiring staff; the cost of equipment required; and the cost of supplies.


You will need to provide Financial statements, Management accounts,  Business plan, Financial / cash flow forecasts, Budget planner, Statement of assets and liabilities, Bank statements

This will provide evidence of your current and forecasted situation, ensuring that the necessary documentation is available to make an informed and responsible decision. It also helps them to understand how your business would service the finance.

10 Steps to help you plan and apply for finance

A lack of finance can hold your business back and stop it from achieving its full potential. Here we have listed the top 10 things to do before you apply for finance.

1. How prepared are you?

Do as much research on the industry you are looking to enter as you possibly can. Know the products, the competitors and how others operate. You could find important information which may require you to change your business idea, so it’s always best to know what’s happening in the market.

2. Complete a Business Plan

A business plan is a written document that describes your business. It covers objectives, strategies, sales, marketing and financial forecasts. This document can also represent your business in an application to get funding, so make sure it’s saying what you want it to say.

3. Review your plan – things will change

You need to be sure that what you are presenting is as up to date as possible. Remember that a Business Plan is a living document and should evolve as your business develops.

4. Complete a Cash Flow Forecast

This is a forecast of how you see your business performing financially and for anyone assessing whether to lend or grant you money, it’s their opportunity to see if you have thought everything through. So make sure you include all of your costs and your revenue streams. It’s important to be realistic.

5. How much money will you need from your business?

A Personal Survival Budget is a list of your personal finances and completing one will show you the amount that you will need to take from the business to live on. Our free Cash Flow Forecast has a Personal Survival template you can use. You may be surprised at how much you are actually spending!

6. Does your plan match up to your forecast?

Check that the numbers you mention in your business plan are in your cash flow forecast. Everything needs to tally, so make sure you check that you aren’t saying one thing in your plan and another in your cash flow.

7. Get proof of any sales and contracts

Before you forecast your sales, you could try and test trade at a market, pop-up shop or even a car boot sale to help predict the demand for your product or service. If you are going to make claims of sales or contracts in place already, you need to be able to verify them with proof. This might mean providing a copy of any contracts you have, for example.

8. Show you can manage your existing debt

If you have any bills to pay or hire purchases (are you paying for anything in instalments e.g. a car?) it’s important to show that you can maintain the repayments. This demonstrates good financial management and gives confidence that you will manage further debt well. You might also like to check your own credit rating in advance.

9. Have an exit strategy and a plan B

Not all start up businesses work out, and if you can show that you have alternative options, you will demonstrate that you are responsible and therefore improve your chances of accessing funding, especially debt.

10. Know what you’re applying for

Provide (in as much detail as you can) a breakdown of what you need the money for. Supplying quotes for equipment or work to be done is always helpful and shows that you are only looking for what you need.

If you’re not ready to apply for funding but have a great business idea, we have a short guide with all the essential information you need to turn it into a reality.


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Author: Alexandr (IP address:,