Things are moving along, you now have the total amount of needed funds calculated and a plan of how to get those funds, you are now ready to learn how to properly request funding from a financial institution or government entity.

When you request funds for your business, you will normally provide a copy of your business plan for the lender or investor to review.  The lender or investor may want to see additional documentation such as income taxes, financial statements, and credit histories.  The best way to be prepared is to ask the lender or investor in advance what documents they need and submit all the necessary paperwork at the same time as your funding request.

As part of your business plan, you need to write a brief paper – only a few paragraphs – explaining your need and plan for the desired funds.  This essay is known as the official “Funding Request” and it will be the introduction to your business plan.  The rest of the business plan should support the funding request and emphasize to the lender or investor that by securing financing you will be able to operate successfully and ultimately provide a return on their investment.

A funding request should always include a few basic elements.

• Your business model, goals and go-to-market strategy

Lenders and investors will want to know what you do.  They want to know what your plans are for the business.  They want to know what their money will be used for.

• Amount you need

This is the amount you reviewed and calculated in the previous section of this leaf.  You need to simply state the amount you think is necessary to accomplish the goals of your business.  A lender or investor does not want to guess at how much money you need.

• Type of funding you want

Do you want a loan?  Do you want an investment?  Do you want a grant?  State what type of funding you prefer.  

• Terms and timetable for the funds

When do you want to receive the money?  If you are borrowing money, then how will you pay it back?  How long do you want the loan for?  What collateral are you offering? If you are asking for equity financing, then how much ownership are you exchanging in return for the money?  How will you work with them?  How involved will they be with the business?

• Impact on the business

What will the funds accomplish?  What will they allow your business to do?  How will they help your business down the road?

Remember, lenders or investors will look carefully at your business when making the decision to provide funds or not.  Make sure you can document or prove all of the statements you make in your funding request.

Take a moment and think about each element in the funding request.  If you are unsure what to write, then do a little research.  For example, if you don’t know exactly what type of loan you need, then take a minute to call and speak to a loan officer.  They will be able to provide the details you need to include in your funding request.

Once you have done your research and thought about each element in the request, you are ready to write your official funding request.