Mind the Other Gap! | Blog | Foundation East
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Mind the Other Gap!

In a previous blog, Foundation East board member, David Martin, called on LEPs to work with the Responsible Finance sector to help close the SME funding gap by providing funding. In this post, he revisits the subject, sharing his belief that what is needed is a new bit of self-diagnostic fintech kit …

I used the diversity and range of sources of funding and finance for businesses as part of a call for greater support for business people in accessing finance in a previous blog.

However, the potential source of funds is only half the problem.  The application of funds is just as important in the acquisition of funds - and even more complex.

When considering the application of funds in business, it is fair to say that every instance of a search for funds is different.  No two businesses are identical.  So much so, that it is simply not feasible to produce a list for comparison to the list of sources just published.

Instead then, here are some of the questions that a business person needs to be able to answer when seeking funds.  In a futile attempt to simplify the issue, the questions have been grouped into sections.  Many questions will be irrelevant to any individual business - or at least to any specific application for funds. The huge variety of potential questions highlights the complexity of the diagnostic and matching process involved in finding finance (or funding - they are different things).

 

NEW BUSINESS START UP

 

  1. Have you started yet?
  2. Who's business is this?
  3. Who is in control of the venture?
  4. Did you / will you incorporate?
  5. Is your product/service developed?
  6. Have you the team in place that is needed to operate?
  7. Is your business plan adequately developed?
  8. Can you describe the business clearly in two sentences?
  9. Can you tell us in five minutes why we should provide funds for you?
  10. Are you looking for a loan?
  11. If looking for investment, what is the deal?
  12. Have you used grant funding?

 

 ESTABLISHED BUSINESSES

 

  1. What is the legal status of your business?
  2. Are you a registered Charity?
  3. Are you a social enterprise?
  4. Where is your business located?
  5. What is your product/service?
  6. Where do you sell your product/service?
  7. Have you received any state aid?
  8. How many people do you employ?
  9. Is this a family business?
  10. How many years of accounts have you filed?
  11. Have you prepared detailed financials to support this application?
  12. What are you going to use these funds for?
  13. Funding for Capital expenditure, or Revenue?
  14. What will you do if we are unable to help you?
  15. Who else are you asking to help with finance?
  16. Do you have specialist financial advice?
  17. Can you describe the business clearly in two sentences?
  18. Can you tell us in five minutes why we should provide funds for you?
  19. Whose survival is essential to the survival of the business?

I could go on, but the task is clear.  I have yet to meet a business person who has sufficient understanding of the entire range of sources and application for funds that they can find the right solution first time, unless by luck.

Nevertheless, it is certainly possible for a skilled and experienced adviser to focus the search by refining the many alternatives to those that are crucial to any given situation.

I believe that this refining activity is capable of development into a self-diagnostic process that will better prepare business people to navigate the access to finance minefield. I urge LEPs to get on board with their local Responsible Finance Provider, so, Foundation East in the Eastern region,  and help make it happen …

 

 

  • About the Author

    David Martin

    David joined Foundation East in 2012 and contributes to various committees drawing on his experience in both the private and public sectors. The last 18 years of David’s career has been at CEO level in the Engineering and Manufacturing industry. Prior to this he had a very successful career in Finance and Marketing. Among other roles, David is a fellow of the Institute of Consulting and a proprietor with Commend Business Development, which helps SMEs in the East of England grow and develop.