Hui a Tau 29 & 30 September, Queenstown FUNDING Phil Broughton and Stephen Craig-Pearson.
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Transcript of Hui a Tau 29 & 30 September, Queenstown FUNDING Phil Broughton and Stephen Craig-Pearson.
Hui a Tau29 & 30 September, Queenstown
FUNDING
Phil Broughton and
Stephen Craig-Pearson
Business Funding
• Main types
• Funding Stages
• Equity Funding
• Debt Funding
• Q&A
Types
• Grants
• Suppliers
• Debt
• Friends/family - equity
• External investors - equity
Funding Stages
Stage 1Start Up
Stage 2Early Stage
Stage 3Growth
Stage 4Maturity
Grants – total or subsidised
e.g. – Enterprise Allowance– Poutama – Local Economic Development– Central Government– MWWL
Trade CycleTrade CycleCash
Purchase materials
Manufacturing
Inventory
Sales
Debtors
Time line
between stages (Days)
External Finance
Asked Received
Debt 34% 96%
Equity 6% 76%
Did not seek finance
64% -
Debt Finance
• Low cost
• Flexible
• No dilution and minimal control
• Repayment ability
• Security
Applying for (Debt) Finance
• How much and why
• Owner’s contribution
• Business Plan
• Profitability
• Security available
• Key issues - Understand & Have a Plan
• Communicate well - proactive, reporting, no surprises, initiate meetings
• Give the Bank every chance to advocate for you as their client
• Understand the credit process
Types of Debt Finance
• Banks
• Finance Company
• Leasing
Equity Investors
• Enables growth
• Skills and experience
• Transaction costs: legal and due-diligence
• Return expectations vary
• Dilution of voting rights
Becoming an Attractive Business
• Personal Qualities
• Business Qualities
• Product/Service Quality
Business Funding
• Grants
• Internal – creditors and profitability
• Debt – security / cash flow
• Investors – self/friends/family & external
Questions
Thank you