If, after careful analysis, you decide to seek extra finance for your business, the following actions will help build your case to a bank / financial institution or investor:

• Your accountant or financial adviser will be familiar with the documents required
• Financial statements including Profit & Loss account, Balance Sheet, tax returns for current and past years trading are usually required
• A cashflow forecast will show where new funds are needed.

To prove that the business represents a worthwhile investment, will require a concise statement of need to be prepared. Setting out your case will identify whether finance needs are short-term or long-term. Identifying a potential lender or investor then becomes easier.

Short-term financing difficulties arising from changed economic conditions or competition should be met in the first instance, by an internal strategic response. For example, try cutting costs and developing competitive products. Funding can be sought specifically to carry out these strategies.

Typically, business growth requires increased working capital as well as investment in fixed assets. This is financially more complicated. Working capital needs are usually met by short-term debt such as a bank overdraft. Fixed asset purchases are usually funded by long-term debt and/or equity.