A business success story Following on from our post “Financing: How to take charge of your business’s future growth”, I wanted to share a story of a small, but fast-growing family-owned technology company that needed funding to support its growth trajectory. The family wanted extra working capital to increase sales staff and generate revenue, but they were facing a number of obstacles. Limited credit history – the company had grown organically since launching and had no previous debt funding. Without any business lending history apart from credit cards, the owner was finding it extremely difficult to secure a loan. Unclear business model – the company didn’t have a traditional business and had not been able to articulate this to their bank as a result the institution didn’t have a good understanding of its financial model. Asset light – the company was also light in assets and its investments were mainly in staff and development of intellectual property. The family approached Deloitte Private, and we were able to help the owner secure a loan at a competitive market rate and on terms that suited the business. We helped the business present its funding request to the right Relationship Manager. To achieve best positioning, we advised the client on the content of the Information Memorandum (IM) using in-depth knowledge of how the credit risk would be viewed by the lender and credit teams. The end result: an extra $2.9 million to fund the company’s growth. Four step approach to financing While each business, client and situation is unique, there are some important steps we recommend: Develop a good understanding of your business, future plans and funding requirements, translating them into a strong financing strategy Scope the market using your advisor’s industry knowledge to identify potentially suitable banks and products where necessary, sounding out contacts on a no-names basis Collaborate with your advisor and the bank to develop a comprehensive IM, whilst using their expertise to help you select the best bank and products for your needs Draw on the expertise of your advisor to help you negotiate the final lending terms with the bank and to close the transaction. When scoping the market it is critical to identify the best banker as well as the best bank – this is where your advisor’s industry knowledge comes to the fore. Finding the right person in a large institution is critical to securing the best financing.