Broadgate Corporate Finance Blog

Approaching Business Financing from a Marketing Approach

Most people looking for business financing, be it in the form of a bank loan or from a venture capitalist, could benefit greatly from considering their efforts from a sales view point. By that I mean, treat obtaining money on credit or equity the same way you would treat obtaining more money from bigger sales or new clients.

Before you launch a new product or service you ask, "Why should my customer choose me over my competitor?" (Or atleast you should!). In the same way, remember that you are competing for financing dollars in the same way that you are competing for sales dollars from your competitors. Your banker or potential investor probably has more businesses asking for her money than she could ever finance even if she wanted to.

He is going to make decisions in the same way that your customers do now. "Does this parts distributor meet all its orders on time?" "How long has this marketing firm been around?" etc. More likely, the questions are going to be tougher than these and strike right at the core of your business's flaws. He is going dig around your income statements and ask why didn't the company meet sales projections two years ago. You'd better be ready with convincing answer backed with hard facts.

The take home message is to come prepared with a plan of attack and to remember that you are competing just as fiercely for financing capital as you do for sales.

posted by Michael Anders @ 9:01 PM