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The Triple “A” Funding System – Step Five – Funding Application

This week we continue to look at our unique Triple “A” Funding System, which is the system we use every time we work with a client. It is a specially devised 9-step system which speeds up the process of obtaining business finance for our clients.

In last week’s blog, we finished looking at Step Four in the System, called the Six Stage Funding Analysis.

This week we move on to Step Five – the Funding Application.

The first four steps in the Triple “A” Funding System all lead to this point.

The Deal Recon, the Deep Dive Evaluation, the Funding Roadmap and the Six Stage Funding Analysis are all preparation for step five – the Funding Application.

Over the years that I’ve worked with clients and lenders, I’ve discovered three important things when it comes to making a funding application:

  1. Careful preparation and analysis is crucial
  2. You only get ‘one shot’ at making a Funding Application
  3. You must make sure the information sent to a lender is concise, complete, and in order

Let me explain.

By now, if you have read my previous blogs on the Triple “A” Funding System you will have realised that nothing can replace careful analysis.

In fact as a broker, I would go as far as to say if we don’t carry out a careful analysis of our client’s funding requirements, we are doing them a disservice. My view is that if we don’t fully understand our clients funding requirements how can we possibly explain them to a prospective lender.

So careful analysis and preparation is crucial.

The second point is ‘you only get one shot’ at making a Funding Application.

What I mean is, when a deal is sent out to a lender, if it hasn’t been carefully analysed there is always the possibility that something will get missed, or worse, that incorrect information will be sent.

If this is the case, and the lender declines the deal, the opportunity with that lender has gone. All because the deal wasn’t analysed properly in the first place.

So, going back to the first point, before sending any funding application to a lender, we always make sure it has been carefully analysed and reflects exactly what funding is required. We then check it and re-check it, before sending it out to a lender.

Finally, we make sure the information we do send to a lender is concise, complete and in order.

As a commercial finance broker over the last 25 years, one thing I’ve learnt is that access to funding is very often time critical.

Project deadlines, cash flow pressures, unexpected business opportunities. For these and many other reasons, success often means getting to “Yes” on a finance application as quickly as possible.

And that’s the problem. In the rush to secure funding, there is one mistake made time and time again – poor presentation.

When talking about presentation, I’m not talking about shiny letterheads and colour graphics. Rather, I’m talking about making sure a finance application is complete, concise and in order.

Just like the rest of us, the people who review your finance application are busy people. Therefore, it is important not to make it hard for them to quickly grasp the proposal.

So, at all costs, we avoid sending in half an application, with “bits and pieces of information” to follow.

Instead we make sure the loan application is complete with all the relevant information included.

Also, the application needs to be concise and in order. What I mean by concise is, the lender at this stage doesn’t need “War and Peace”. They need enough of the relevant information about your application, so they are able to provide initial feedback about how they can help.

So, keeping the application concise, certainly at the initial stage is important. More detailed information can be provided in due course.

Finally keeping the application in order is important. When making an application on behalf of a client, we are in effect taking the lender on a journey.

So, as we’ve pointed out in the last couple of blogs, the Six Stage Funding Analysis is not a random document. Instead, it is devised and structured to lead a lender through your funding application in an ordered way.

So to summarise, thorough analysis and careful preparation are crucial components of putting together a complete, concise and ordered funding application.

And having made a successful Funding Application to the chosen lender, the next step in the Triple “A” Funding System is the Lender Review.

We’ll look at that next week.