Funding Growth: Leveraging Banks, Investors & Grants Without Overstretching

Mindset first: fuel the machine, don’t drown it

Growth dies when cash runs out or when terms strangle flexibility. Your job is to sequence capital intelligently, matching instrument to use-case and keeping optionality.

Build your capital stack (fit for purpose)

1) Working capital

• Overdraft / revolving credit facility: smooth short term gaps.
• Invoice finance (factoring/discounting): unlock cash tied in receivables.

Trade credit: negotiate terms with suppliers; align to your cash conversion cycle.

2) Asset backed lending

• Hire purchase / leasing: vehicles, plant, equipment match term to asset life.

Keep covenants simple; understand security and cross default clauses.

3) Term loans (growth projects)

• Fund defined initiatives with measurable ROI (e.g., new line, region, equipment).

Use milestone drawdowns; test sensitivities in your model.

4) Equity & quasi equity

• Use for step changes: new markets, acquisitions, platform investments.

Balance dilution vs speed; keep cap table clean.

5) Grants & incentives

• Explore innovation and regional grants where applicable; programme availability changes seek current guidance.

Consider R&D claims/tax incentives with qualified advice; rules evolve.

The funding strategy (5 principles)

1. Match term to purpose: short term cash gaps ≠ long term debt.
2. Protect covenants: build headroom; model downside.
3. Portfolio approach: combine instruments; don’t over rely on one source.
4. Proof before price: show traction to improve terms.

Board discipline: monthly cash and covenant review as a standing item.

Prepare like a pro (what lenders/investors expect)

• Financial pack: historicals, 24 month forecast, assumptions log, scenarios (base/low/high).
• Unit economics: gross margin, contribution, payback, LTV/CAC where relevant.
• Use of funds: specific projects, ROI, milestones.
• Security & structure: assets, guarantees, ranking.

Governance: board minutes, policies proportionate to stage.

Cashflow mastery

• Weekly 13 week cash forecast; update actual vs forecast.
• DSO/DPO optimisation; deposits and milestone billing.

Inventory discipline: reorder points, ABC analysis, shrinkage control.

UK note

Funding schemes, guarantees and incentives change frequently. Consult a qualified finance adviser and check up to date guidance before applying or marketing eligibility claims.

The 90 Day Funding Plan

Days 1–15

• Build 24 month model + 13 week cash forecast.
• Prioritise use of funds by ROI and risk.
• Map your capital stack (what instrument for which project).

Days 16–45

• Prepare lender/ investor materials; clean data room.
• Shortlist 10–20 targets by instrument and cheque size.
• Start outreach; log pipeline like sales.

Days 46–75

• Compare term sheets (rate, fees, covenants, security, flexibility).
• Negotiate; run scenarios on covenant headroom.
• Board review; confirm drawdown plan.

Days 76–90

• Legal docs + compliance; implement reporting pack.
• Schedule monthly covenant and cash reviews.
• Execute projects with milestone tracking.

Use AI as your in house analyst

• Draft the narrative, executive summary and FAQs.
• Build diligence checklists; summarise meetings and next steps.
• Stress test model assumptions; produce lender packs from your data.