At a time when Banks are sitting hard on their cash reserves, Investors are having to find more innovative ways of Finding Finance. Finding the money is only the first hurdle you will have to jump if you or your business are going to ultimately secure the funds for expansion, redevelopment, commercial premisses or whatever else it is that the business needs to grow.
So.. What makes one person’s pitch for finance rock and another’s roll?
It’s The Fizz.. It’s ‘The Soda in The Campari’
Lenders look for certain information when they consider a Finance Proposition. They remember what to ask for by referring to CAMPARI.
C is for Character and that’s your Character. Just like any partnership; and essentially anyone lending you money is becoming your partner in business. You wouldn’t think about taking on a partner unless you knew and trusted the person you were going into business with, so why should the lender. That’s why it’s always best to start with a lender who knows you and your business. Failing this, you have to convince the lender that you are trustworthy.
A is for Ability; can you do what you say you can do, can you prove it. It may be that you have Educational Qualifications in your field of expertise or that you have years of experience running a similar business.
M is for means; God forbid your business plan will fail, but if it does can the lender recover its loan from your assets. Lenders hate risk and conversely love security, be prepared to provide a personal guarantee or use your home as security if there is no security in the business itself.
P is for Purpose; so what’s the money for? If your business needs money to support a sinking ship, then think again. Tighten the sails and stop the leaks first. Lenders like forward thinking businesses, those that are full steam ahead..heading for distant shores..not sinking.
A is for Amount; is the amount you are asking for the right amount to achieve the objectives of your plan. Prove it.
R is for Repayment; The lenders want to see that you can afford the monthly repayments for the debt. They want to be convinced that your cash flow forecast is not a work of fiction, rather based on reliable data, such as a full order book or OAP’s banging on the door of your nursing home.
I is for Insurance; The worst case scenario - something might go wrong; your key person might become ill or die, the factory might burn down..not likely but possible. Any self respecting lender would want to know you had considered all eventualities and having the right insurance will cover these bases.
Meeting the Campari criteria requires some tough work ahead and thats before you make the pitch for finance.
The pitch requires the Soda..the Fizz which will sell your plan to the lender.
Can you have a Campari without the Soda.. yes of course but will it hit the spot, I doubt it.