Accessing funding: preparing a business plan - Crowe Ireland

Accessing funding: preparing a business plan

02/04/2020
Accessing funding: preparing a business plan - Crowe Ireland
The COVID-19 crisis has put considerable strain on the short-term liquidity of most businesses. Many urgently need to secure appropriate funding to sustain themselves through the next few months of uncertainty. In this article we outline the importance of a business plan and robust financial projections when approaching lenders. 

Business plan

A natural starting point to any funding application is to prepare a business plan. This should demonstrate to the lender that your business is viable in the long term, even if it is facing short-term issues. It is important that you set out your future cash flow capacity to meet the repayments on the loan you are seeking. 

The key requirements of a business plan of this nature are: 

  • Provide an overview of the business
  • Illustrate the impact that the COVID-19 crisis has had on your business
  • Quantify the funding requirement and the expected use of funds
  • Outline the measures you are taking to minimise the impact of COVID-19 on the long-term viability of your business
  • Prepare robust financial projections that support your capacity to meet future loan repayments

A key consideration for any lender is the strength and depth of the management team. You should include relevant information on your track record and successes.

Financial projections

With the current uncertainty, it may be difficult to prepare financial projections for the next number of months. You should make reasonable assumptions regarding your revenues and costs and set out the basis of these assumptions. It is always worth stress-testing these for different scenarios to illustrate the impact of relevant factors – for example lower revenues, a delay in securing the revenues or various cost assumptions. 

Your projections should clearly identify the surplus cash available to meet debt service. It should also readily identify any other loans or commitments which will need to be repaid.

If you are looking to engage with your existing funder or a new lender about raising additional funding for your business, contact a member of our corporate finance team to find out how we can help. We have a well-established track record of helping SMEs secure funding lines and have developed strong and long-lasting relationships with all major lending institutions. We can guide you through the process to help ensure a positive outcome.

Some related articles:

Considerations for SMEs raising finance

Naoise Cosgrove, Managing partner - Crowe Ireland
Naoise Cosgrove    
Managing Partner
Corporate Finance
Partner, Corporate Recovery - Crowe Ireland
Aiden Murphy  
Partner
Corporate Recovery
Gerard O'Reilly, Partner, Audit - Crowe Ireland
Gerard O'Reilly  
Partner, Audit