Composing a Funding Request

Composing an effective funding request is a critical aspect of the process of obtaining funding for your business. Regardless of the level of perceived success you have of your business, top-level clients you have or wish to cater to, or how many innovative products or services your business will offer, potential business partners, lending institutions or other financial providers will not be aware of these factors unless you effectively convey this information in your proposal.

Your goal is to make whoever reads your proposal understand that your business is different from the millions of other start-up businesses or business expansion projects out there. This can be achieved by providing pertinent information in regards to the following:

Strength of Management-Showing the level of expertise of the owner(s) and managers can help put the lender's mind at ease, and increase your chances of getting funding for your business; which is especially imperative for start-up businesses.

Strength of Brand-Showing proof of an established, strong company brand is critical in this process. A company Web site with traceable traffic generation information, evidence of discussion of your products or services and company on online forums, or other proof of market awareness of your brand can strengthen the lender's confidence that your company will flourish. In some cases, company brands can be used as collateral, if deemed strong enough.

Business Strategy-Development and showcasing of a sound business strategy will show your potential lenders that you business has direction and sustainability. The only way lenders can picture where your business will be in the next 5, 10 or 20 years is if you show them.

Target Market-You must effectively convey the fact that you know whom your target market is for your business' products and/or services. Your business can offer the most revolutionary products or services, but targeting these products and services to the wrong niche market will lead to the inevitable demise of your business. Conduct thorough research to determine the demographic information for your target audience. Potential lenders will trust that this will be a common practice for your business in the future, which will enable you to keep up with changing markets-leading to the longevity of your business.

Competition-Just as in the case of understanding your target market, if you show your potential lender that you understand who your competition is, the lender will believe that you will consistently conduct research to keep up with industry trends, and offer cutting-edge products and services to contend with top competitors.

Big Name Clients-Having well-known clients in your repertoire simply means that it will be easy for your company to continue to consistently attract more companies of similar stature.

Innovation-Supplying the same products and services to crowded markets is the best way to have a business that never quite gets off the ground. Develop innovative products or services that will ensure new clients (and lenders) will come flocking to your business.

Intellectual Property-Along with innovation, showing actual ownership of a product design or service idea will further demonstrate that your company will be bringing something new to your particular industry or market, which increases the long-term stability of your company.

Recommendations-If other financial institutions and businesses trust your business, lenders will be more apt to trust your business as well. Slipping in a few solid recommendations could be the difference between an approved application and a denied application.