Using our business education lesson plan tools and free business planning course your chances for getting your funding request are greatly enhanced. Here you'll learn the importance of The Funding Request section of a business plan.
This section of your business plan is where you will request the amount of funding necessary to support your business, whether the purpose is to start up a new business or expand an existing one.
"Acceptance of a funding request is never by accident. Bank lend money to people who have good credit, experience, assets for security, and a more than reasonable chance of repayment."
If possible, provide more than one option for prospective lenders or investors to consider. Each scenario for funding, however, should stand on its own and be an appropriate amount to fully support the project.
As you outline your current and future funding requirements as instructed in the business education lesson plan, be sure you include the amount you need currently as well as the amount you will require at a future date.
Provide a clear purpose for the funding. Explain in detail how the funds will be used and how those funded activities will help promote and drive the growth of the business. Some ways the funds may be used could include capital expenditures; working capital; debt reduction; expansion and new acquisitions.
A quick summary of what’s covered in your funding request includes:
Lastly, it is imperative that you make clear to the investor how you intend on repaying the funding provided. You need to exhibit a clear commitment to make good on the trust you are asking them to have in you and your project.
Learn more about what you've learned from this business education lesson plan and The Funding Request section, by reviewing these free sample business plans.
One of the most critical key teachings during a business education lesson plan is the risk associated with borrowing money.
If you start a business on a shoestring and then show a great talent for it and wish to expand, then borrowed capital at reasonable terms can be beneficial. But you need to tread very lightly when borrowing money. Too often people overextend themselves to support a startup venture which they have no solid experience in – and they quickly lose their business and carry a large burden of unpaid debt in the process.
"Borrowed money is the downfall of countless small business ventures. Avoid debt completely if possible. If necessary, use it sparingly."
A person’s success in the line of business he wishes to enter depends greatly upon his insights into character, upon one’s ability to choose just the right people to assist him. Surround yourself with a support system of well qualified, energetic and hard working people who share your vision and are committed to making the dream a reality.
The main message of this business education lesson plan is to be content to start your business in a small way. After you have demonstrated a capability to drive results and grow the business, you will have little difficulty in gaining credit to support future expansion. Because of your expertise, your ability to negotiate better terms for financing will also greatly increase.
Just because you can borrow money, doesn’t mean you should!
The best advice is to avoid debt as you would avoid standing in oncoming traffic. Make up your mind never to have your name on another man’s book of accounts. Terms such as, “the borrower is slave to the lender” and “he that goes a-borrow’n, goes a-sorrow’n”, hold a lot of wisdom that we should bear in mind before ever signing a note of credit. Proceed with caution and manage your risk closely.
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