GUIDE TO ACQUIRING

STARTUP FINANCING
CONTENTS

BEFORE YOU BEGIN

FORECASTING
TYPES OF WORKING CAPITAL FINANCING
CAPITAL FOR FIXED ASSETS
POTENTIAL FUNDING SOURCES
FINANCING PACKAGES
HOW A CPA CAN HELP

2
BEFORE YOU BEGIN

YOU WILL NEED:

A written business plan
Objective
Management team
Market
Products and services
Competitive advantage
Financial forecast

3
FORECAST REVENUE, EXPENSES AND OPERATING
CAPITAL REQUIREMENTS

CALCULATE:
Monthly projected sales revenue (minimum of 36 months)
Break down by cash sales and credit sales (accounts receivable)
Include assumptions

SUBTRACT:
Monthly expenses
Product costs
Salaries
Rent
Utilities
Insurance
Software subscriptions
Travel
Interest on loans (assume market rates)
Credit card processing fees
Any other significant expenses (except depreciation)

Other monthly cash outflows

Non-financed fixed asset purchases
Product purchases that remain in inventory
Principal payments on loans.

RESULT:
Operating capital required
4
EVALUATE TYPES OF WORKING CAPITAL FINANCING

LINES OF CREDIT
Short-term
12 months operating history
Monthly interest payments
Callable
Secured
Personal guarantee
Covenants
TRADE CREDIT
Typically 30 days
Relationship/performance based
No interest

5
DETERMINE CAPITAL NEEDED FOR FIXED ASSETS

FACILITY
EQUIPMENT
TECHNOLOGY
FURNITURE AND FIXTURES
VEHICLES

6
LIST YOUR PERSONAL ASSETS AND LIABILITIES

PERSONAL FINANCIAL STATEMENT

DEMONSTRATE FINANCIAL
COMMITMENT BY:
Investing cash in the business
Signing a personal loan guarantee
Pledging personal assets as collateral
CREDIT REPORT

7
IDENTIFY POTENTIAL FUNDING SOURCES

BANK LOANS
SBA LOANS
LEASES
CREDIT UNIONS
VENTURE CAPITAL
GRANTS AND COMMUNITY
DEVELOPMENT LOANS
CROWDFUNDING

8
 PUT TOGETHER A FINANCING PACKAGE

EXAMPLE FOR A CRAFT BREWERY

SOURCE AMOUNT
Owners personal savings/investments $50,000
Angel investor 25,000
Job creation grant from regional economic development authority 50,000
Grant from downtown development corporation to renovate 50,000
historic building (made to building owner who will leases to you)
Capital equipment loan from community bank 200,000
$475,000
Total

9
A CPA CAN HELP YOU

FINANCIAL FORECASTS
PERSONAL FINANCIAL STATEMENT
FUNDING SOURCES
FINANCING PACKAGE
BOOKKEEPING, FINANCIAL
STATEMENTS AND STRATEGY

10
Questions?
THANK YOU