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4 Things to Check Before You Apply for Business Funding

Business

A lack of finance can hold your business back and prevent your brand from becoming as successful as you're hoping it will be. The good news is that, today, there are more and more options becoming available that you can consider in order to get start-up capital for your new business venture, or inject some funds into the business for necessary growth and development to help you hit your goals. Before you apply for funding, here are some of the key things that you will need to consider.


#1. The Type of Funding:

The first thing that you should give some thought to is the type of funding that you're going to secure for your business. There are several different options available; business bank loans, online loans, peer-to-peer funding, angel investments and even crowdfunding are some popular options that businesses use today to get together the funds they need. Consider all of the various options carefully and determine which would be the most beneficial for your business in terms of how much money you can raise, how quickly you would be able to access it, how likely you are to be accepted, and how you'll be expected to make repayments. Check out Become for a wide range of different business lenders to consider.

#2. Your Credit Score:

Whether or not you have had a business before, if you are applying for certain types of funding – especially a business bank loan – then you'll need to take your personal credit score into consideration. Most banks that provide funding for businesses will look at the credit score of the owner to get a better idea of your financial situation and determine your level of risk when it comes to lending money to your business. So, don't let your personal financial history come back to bite you; check your credit report first and determine what needs to be done to improve it, if needed. And, don't forget to check your business credit score too.

#3. Your Business Plan:

No matter what kind of business funding you are applying for, your business plan will be pored over and taken into careful consideration. Taking some time to improve and refine your business plan, along with making sure that you have planned for how you intend to use the funding and how it will add value to your company, is absolutely crucial. It's worth including this, whether you're going to invest the funds into employees for your company or a better online marketing strategy.

#4. Your Past Sales and Contracts:

In order to secure funding, you will likely need to create a sales forecast to include in your pitch and give potential lenders or investors a better idea of how much money they can expect your business to make using the funding that they will provide. Before doing this, it's worth getting proof of any sales and contracts that your business has already secured, which will add some weight to your forecast and show prospective lenders that your brand has the potential to be successful.

Getting funding for your business is a huge step forward, so it's crucial to be as prepared as possible.

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Business

How These Co-Founders Exited for $100M Without Any VC Funding

When their frustration with current fabric care options had fashionistas Gwen Whiting and Lindsey Boyd worn out, the two entrepreneurs made it their mission to start a new niche and launch their very own at-home, eco-friendly laundry detergent line.


With a mission of turning an everyday domestic chore into a luxurious experience, these entrepreneurs not only conjured up an idea for an unconventional product line, but they successfully built their business while turning down the offer of every venture capitalist to knock on their door.

Gwen Whiting and Lindsey Boyd co-founded The Laundress in 2004 after dealing with their own personal frustrations with limited clothing care options. Whiting, having worked at Ralph Lauren in design and Boyd having worked at Chanel in corporate sales, soon accumulated a stylish wardrobe of designer pieces as perks of their jobs in the fashion industry. However, the duo quickly realized that the maintenance required for upkeeping these items were far from adequate. Laundry products on the market at the time did not cater to delicate textures and fabrics such as tweed blazers, cable-knit cashmere and silk blouses. Taking their clothing to the dry cleaners also proved hopeless as their clothing would often come back with stains or even be ruined despite the overload of chemicals used to clean them. With nowhere left to turn, Whiting and Boyd were determined to create their own laundry solutions designed for specific fabrics.

Not only did the entrepreneurs develop the business expertise needed to finally begin their own company, but they also shared the same educational background that equipped them to pursue their unconventional business venture. Whiting and Boyd met in college as students at Cornell University majoring in Fiber Science, Textile, and Apparel Management and Design. The pair was introduced by a mutual friend and instantly knew they would become business partners. "It was inevitable that we were going to have a business together. We are both extremely entrepreneurial by nature, and it was one of the connections that we instantly shared" said Whiting. After focusing on pursuing their own individual careers for a while, Whiting and Boyd quickly discovered a void in the fabric care marketplace when their clients would continuously inquire about the upkeep of their designer pieces.

The entrepreneurial duo was committed to researching and developing their own eco-friendly laundry products and soon launched their own at-home solutions for specific fabrics like silk, wool and denim, which ultimately eliminated the need for dry cleaning for those particular items. Despite their products filling a necessary void in the market, it quickly became challenging for the founders to persuade people to shift their focus away from traditional laundry care options in order to try their products. However, Whiting and Boyd believed in their mission for the Laundress and bootstrapped from the very beginning, refusing all venture capital funding with the goal of growing organically. In order to be successful, they had to get creative in fundraising. "In the very early days, we funded business development by hosting a 'for profit' party at a New York City restaurant and inviting friends, family, co-workers, etc. to support our new venture. That was pre-Kickstarter and an inventive way to make everyone feel a big part of our decision to be entrepreneurs," said Whiting.

While turning down VC funding as new entrepreneurs seems unimaginable, it is as equally unfathomable to consider how these women gained national traction without social media, all the while hustling to fund their business. For Whiting and Boyd, who started their business before social media existed, it was imperative that they promote their brand by leveraging the resources they had available to them. The CEO's were one of the first to sell consumer goods, let alone detergent, online with the goal of reaching a national audience. Despite having limited retail distribution, they leveraged the power of their website and became featured in publications on both a national and international scale. "Before social media platforms existed, we nurtured our own Laundress community with engaging content on our website, step-by-step tutorials on our blog, and one-on-one communication through our Ask The Laundress email," Whiting explained. With technology evolving and the birth of social media platforms, the founders expanded the conversation about their products from website, blog and email to platforms like Facebook and Instagram.

As female entrepreneurs, Whiting and Boyd faced additional hardships as misconceptions about their mission ultimately proved to disappoint more than it encouraged them. As women selling luxury detergent, there existed a preconceived notion that funding would be more easily attainable based upon their gender.

"Everyone thought it was easy to access capital as female entrepreneurs, but it was actually very challenging. We had this unique and disruptive idea within a very traditional space and it was hard to get people on board at first. It's been a continuous journey to educate people in fabric care and home cleaning," said Boyd.

Reflecting on their journey as entrepreneurs, the founders express no regrets about refusing to accept venture capital throughout the process. "Over the years, we could never quantify the cost benefit of VC funding so we continued to grow organically and remain independent by funding ourselves with credit cards and loans," explained Boyd. While their decision proved fruitful, the duo expressed their consideration towards other entrepreneurs who may not be able to fully fund their business as they grow. Because funding is a situational experience, entrepreneurs must ultimately do what is best for their business as no one path is optimal for every entrepreneur or every business.

With an increasing amount of women entering entrepreneurship with their own unique set of products or services, the CEO's offer up one piece of advice on how female entrepreneurs can be successful in their endeavors.

Whiting: "Our advice to anyone looking to build their brands: Have a strong business plan and vision. If you are not disciplined to write a business plan first then you are not disciplined to start a business. Get your ideas down so you ask yourself the right questions; it helps you get organized and plan next steps."

Boyd: "Create quality products without sacrificing the ingredients—no cutting corners. What you create should be the most important piece. Stay passionate, and trust your instincts and follow your gut—something woman are awesome at!"