Courtesy / Camden National Bank
Randy Cruz, Camden National Bank
October 20, 2022
How to apply for funding: 4 tips for businesses
By Randy Cruz, Camden National Bank
Receiving funding is a crucial step in scaling up your business. Companies of all sizes — but especially start-ups and small businesses — frequently ask what it takes to get approved for funding in order to grow.
Business health and long-term success depend on growth — whether this means adding a new office location, hiring on additional staff or investing in upgraded technology. When you’re ready to apply for your next loan or approach a business banker, there are several items you’ll want to have in place first.
Come prepared with answers. Lenders need to know the basic information about your company’s operating cycle and industry dynamics. Important elements of your business such as your customer base, marketing strategy and competitor landscape impact your ability to thrive. How do you plan to deepen relationships with existing customers and acquire new customers? Who are your suppliers, and what is the timeline between production, sales and payments? Do you know how the current economic and political conditions will impact your success? Be prepared to answer these kind of fundamental questions when you’re seeking financial support for growth.
Streamline your financial reporting. Financial reporting is one of the strongest tools you have for demonstrating your company’s financial health. Your bank will require timely and accurate reporting in order to evaluate your businesses cash-flow, leverage and liquidity. Your reporting system should allow you to monitor your cash flow on a regular basis, project your growth and track your progress. You’ll want to be able to show that you can scale effectively without jeopardizing the quality of your work or losing revenue. Many banks offer treasury management solutions that make cash management and reporting even easier for you — be sure to take advantage of those resources.
Build your human capital. A strong management team is essential to smooth, effective transitions. It’s important to have the major skillsets covered, so that you have experts in finance, human resources, operations and sales who can lead even in the absence of your founder or CEO. Even if some areas need to be outsourced, you’ll want the foundation in place before attempting to grow further. In addition to your internal team, successful business leaders establish trusted advisors and allies. Do you have a strong CPA and legal counsel in place? Perhaps you have a board of directors, advisory group or close mentors that provide additional support. Make sure your team is strong, talented and aligned before requesting funding for a big change.
Know your banker. During both day-to-day business and periods of growth, the expertise and support of your banking team makes a huge difference. Lenders and treasury management specialists want to see your business reach its full potential. Establish a trusting relationship with your bank and always expect guidance, responsiveness and personal attention from your banking team.
Following these four steps will help set you up for success when applying for the funding that is crucial to your business’ growth.
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