5 Tips for Writing a Financing Application That Lenders and Investors Will Love


Startups, long-established businesses, and any business in between may need an influx of cash at some point. Obtaining financing from lenders or investors is one way for businesses to obtain the funds they need. But how you write a business funding application can make the difference between a yes or a no. There are five key tips for writing a business finance application – and I’m here to break them down for you.

5 key tips for applying for funding

One of the many things I’ve learned in my years as a serial entrepreneur is that getting financing can be necessary. Even when you’re putting everything into your business, getting cash from a lender or investor helps you go a little further. With that in mind, let’s move on to my five tips for writing a funding application that lenders and investors will love (so your business can benefit!).

1. Be professional

Being professional should go without saying, but is of the utmost importance when communicating with lenders or investors. And, being professional isn’t just about looks or word choice. It can also include small details, like tone or grammar.

For email, online data submissions, paper communications, or other documents, check the following before sending:

  • Punctuation
  • Grammar
  • Layout
  • Headers
  • Signatures
  • Document Clarity
  • Active voice
  • Your
  • Concision

If you plan to send in your funding application by mail, be sure to complete everything digitally rather than by hand. Typed forms are more professional and generally more readable to others. Do you have letterhead for your business? If so, use it for any cover letters you submit with the application.

Do you plan to submit everything online? Check for any errors before submitting. Consider using word or grammar correction software to help spot potential errors.

2. Do your research

From loans through the Small Business Administration (SBA) to angel investors, there are many options to consider when looking for financing. Rather than creating a model for all investors, research what each option has available and tailor your requests. The last thing you want to do is write a unique funding request.

Instead, sit back and watch what each option has to offer. It may take some time, but research allows you to narrow down your best opportunities. For example, if your business sells novelty t-shirts, you don’t want to apply for funding from an investor who works with technology and software.

Researching potential lenders also helps you determine if there is a funding limit. If you need $200,000, but a lender only provides up to $100,000, your research tells you that you should limit your request. Or, you can seek another lender or investor for the remaining funds you need.

Keep in mind that some lenders (eg SBA) have company size requirements. Researching a potential lender or investor allows you to determine if your request for business funding is a good fit before you sit down to write.

3. Bring documents

Let’s face it: before anyone lends or invests large sums in your business, they must be curious about your finances. Prepare all your financial documentation before contacting lenders or investors to present yourself in your best light.

Prepare the following business financial statements:

Investors and lenders may also want to see other important information, including:

  • Personal Financial Statements
  • Business licenses and permits
  • Documentation of ownership and/or affiliation
  • Information on business loans or mortgages
  • Loan request history

Some investors may require different information. And some lenders may require more or less documentation from you. Be prepared to provide everything and all up-to-date financial records you may have.

4. Provide details

A funding request is not an elevator pitch. It is therefore important to provide as much detail as possible without adding unnecessary filler.

Add the following information to the funding request:

  • Commercial information (e.g. location, opening date, products or services, etc.)
  • Current financial situation
  • Amount of funding requested
  • How do you intend to use the requested funds
  • Explanation of current and future financial plans (for example, how you plan to repay loans)

Explain why you need the amount you are requesting and how you will use the funds. Give lenders or investors details of how you will use the funds to grow your business and repay the loan or make the investment profitable.

5. Be realistic

In an ideal world, your million dollar idea would secure a $1 million investment or loan. Unfortunately, that’s not exactly how the real world works. It is therefore crucial that you set realistic expectations for your business needs.

Take a calculator, a pen and a notebook. Sit down with your financial statements and determine a realistic funding request.

If you are considering business loans, consider the length of the loan’s potential repayment period. Can you afford to repay a $100,000 loan? What about $50,000? What interest rate is too high for you to consider? Consider the impact of loan repayments on your monthly business bills.

Are you looking for investors? Before taking the plunge, ask yourself what maximum percentage of ownership or control you are willing to give to an investor. If an investor accepts the maximum funding request but wants 50% control, are you willing to accept that offer?

If you are unsure of the answers to these questions, consult your accountant or business lawyer for advice.

Writing a Funding Application Gains and Losses

Not all funding requests are successful, and that’s okay. Sometimes you decide that the loan or investment is not right for your business. Other times, it’s just not the right request at the right time with the right lender or investor. Don’t give up after one loss or even a dozen. Keep trying and remember these five tips before you start your next funding application.


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