10PROJECTING REASONABLE OPERATING RESULTS
External financing is predicated on a simple expectation: funders want to get all of their money back with a premium paid for its use. From the time the business owner submits a financing proposal, the funder will evaluate the owner’s ability to repay or return the financing with funds generated by the business or exit event.
The owner’s capability to either create cash flow or enterprise value is integral to obtaining financing.
The funder will expect the owner to provide a realistic explanation about how the proceeds of the financing will be invested to generate revenues for the business. Further, the owner should identify the costs the business incurs to produce these revenues and project the resulting ...