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How do you raise cash
To raise cash externally you will need to
prepare some form of business plan and forecasts (but it is worth
checking what
do you need? to consider the possibility of raising cash internally).
While doing so, bear in mind the banker's CAMPARI checklist as you
will need to satisfy this for almost any external lender or investor.
CAMPARI
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Character
Are you honest, do they trust your integrity and reliability
or have you made exaggerated claims in the past?
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Ability
Do you and your management team have the necessary skills and
ability to run the business?
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Means
How much are you worth (both as a guide to your past money making
performance and your ability to provide cash to cover any short
term problems)?
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Purpose
What are you intending to do with the money? Is it a feasible
idea, that matches funding against the need appropriately, where
you are looking to do something that the bank finds acceptable
given its own policies (eg the banks may not be interested in
lending to businesses in your sector due to its internal policies).
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Amount
How much are you putting in compared to the risk you are asking
the lender to take and are you asking for enough to properly
see the project through to completion?
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Repayment
How long do you need the money for and how is it to be repaid?
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Insurance
What sort of security is available to cover the loan (and you
can check how a bank is likely to value your security on how
much can you borrow)? In addition to the security available
from your business assets, you can provide security by giving
a personal guarantee ('PG') which may also be backed up by a
charge over your personal assets ('Supported PG'). Alternatively,
the Small Firms Loan Guarantee Scheme ('SFLGs') is a scheme
which can provide security by way of a government guarantee
of 70% of start up loans of up to £100,000 (rising to
85% of loans of £250,000 for businesses with a 2 year
track record), get advice from a local
advisor. |
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