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CHAPTER 7 - WHAT AMOUNT DO YOU NEED?

It is extremely important that your financial projections fully support the amount of funds you are seeking. If you are seeking debt financing your request must be very specific. Lenders frown upon you having to come back to ask for more, because you underestimated. Investors may not be inclined to keep your management team in place if you can't make the funding work.

Downside Planning
Take the time to plan for the downside. It is far better to over estimate your capital requirements than to run short and be forced to go hat in hand back for more.

Supportable Assumptions
Both Lenders and Investors are going to want to know that you have reasonably estimated and supported your costs and projected revenues. Your financial pro forma should include detailed information and trade references on the costs of each expense you list.

Association Documentation
In your income projections be sure to include Trade Industry support information or other market information that lends credibility to the conclusions you have drawn. Most associations publish reports of standard industry costs, margins and financial ratios.

Workbook Main Menu I To Chapter 8

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