5 tips for successful growth financing

To ensure the growth of their business, managers are quickly confronted with financing issues. How can you prepare for this step? How can you maximize your chances of obtaining financing? Here are 5 tips for successfully navigating this crucial stage.

1 . Favor a diversified approach

To finance your business’s growth, several types of financing can be mobilized: capital increase, interest-free loan, bank loan, operating grants, short-term financing, etc. Some should be prioritized based on needs. In all cases, diversifying sources will have the advantage of optimizing financing conditions, but also reducing risks and activating leverage.

Jacques Allard, head of Eco CO2 , a company that supports and educates consumers about their environmental impact, says: ” While we were considering financing ourselves by bringing an investor into our capital, the CCI experts advised us, given our profile, to favor bank financing with deferred repayment. We hadn’t considered this solution. However, it allowed us to maintain total autonomy in the management of our company.  “

Furthermore, since Eco CO2 is ESUS (Socially Useful Solidarity Enterprise), it has easily attracted the attention of public and private financing stakeholders with tailor-made solutions or a particular sensitivity to the social and solidarity economy. It is therefore necessary to be well informed about the specific aid available for your own sector of activity.

2 . Opt for a strategic discourse and have a specific financing need

” We find that funding requests often fail due to a mismatch between the tactical and operational discourse of managers and the expectations of a strategic and financial vision from financiers,  ” explains Julie Lamy, head of funding at the CCI Paris Ile-de-France.

Indeed, a Corporate Account Manager in a bank must ensure the company’s ability to meet its financial commitments. They will therefore verify that the requested financing targets a clearly identified need or development project and that the presented prospects respect sound financial balances. A business plan, an executive summary of this business plan, and a 3-year financial forecast must therefore complete the application.

When an entrepreneur provides this assessment by linking it to their company’s results, the correlation between the two reassures the banker.

3 . Increase your equity

One of the first financial indicators a banking or financial institution looks at is the company’s equity. The higher these funds are, the more robust the company will be perceived, and therefore, the more willing it will be to provide financing.

To increase its equity, the company has several options. For example, it can rely on an investment from its managers themselves or their loved ones (the famous “love money”). But other tools exist, including honorary loans offered by networks such as France Initiative or the Réseau Entreprendre . These are zero-interest personal loans that must be allocated to the company as capital or in a shareholders’ current account. They are precisely intended to create leverage to facilitate access to other financing such as bank loans.