Fund Raising

There are couple of ways to raise initial finance to fund your business.

Banks is an source of finance if your business plan is sound and you can repay the money loaned. Key advantage is that the loan schedules are preset, and this allow your company's cash management more predictable. Loan repayment terms can be negotiated to suit your unique circumstance and the interest payments are tax-deductible. However, your assets may be normally tied down as collateral.

SME Loan Guarantee Scheme (SGS) is a guarantee scheme offered by the Government of the HKSAR with objective to help small and medium enterprises to raise loan from private lending institutions by provision of government guarantee. The SGS covers the following 3 types of loans:-

	Business Installation and Equipment Loans (up to maximum guarantee of HK$2 million)
	Associated Working Capital Loans (up to maximum guarantee of HK$1 million)
	Accounts Receivable Loans (up to maximum guarantee limit of HK$1 million)

Venture capitalists specialise in investing in unquoted companies and expecting higher returns in terms of capital gains. The disadvantage of this option is that there is strong competition for venture capital. Consequently, the conditions attached can place heavy demands on the entrepreneur. Additionally, you are selling part-ownership of your company to the outside investor and will relinquish 100% control of your business as a result.

What we can do for you on fund raising ?

Fund raising itself is a give-and-take process. While it involve significant judgement on asset/business valuation, it is more dependent on the business potential, your ability to generate cashflow from the business and the management quality is also of fundamental importance. 

Before you approach the financier for the funding, it is absolutely importance that you as an entreprenuer not only know your business well, as ususal it is, but also have a BLUE PRINT in mind or at least on paper how to develop the business and what to do with the funding. You have to convince the financier that you have the right strategy, right market and the right management team to achieve the objectives.

Therefore, we are there to help you advise the best strategy to strengthen your company competitiveness, better understanding about competitive situation from both strategic and financial perspective. We will help you to analyse your situation, like using Porter's 5 forces, Value Chain Analysis and setting up a sophisticated Financial Model according to your business operation. This will finally leads to a sophisticated loan proposal / investment memorandum which will enhance your opportunity to obtain finance or at least a relatively lower cost of capital. 

What you need to prepare for fund raising ?

an investment memorandum / loan proposal covers the following: 　 why and when your company requires the fund the amount required with itemised breakdowns the size and nature of your business the number of employees and current business assets your company's organization structure background, experience, skill and accomplishments of your management team competition analysis and your strategy to compete in the industry a projected balance sheet a projected income statement for the coming 5-10 years a projected cash flow for the coming 5-10 years The assets you would provide as security (for loan proposal)

	past historial trading records, like audited financial statements for the past 2-3 years
	year-to-date profit and loss statement and the latest balance sheet
	documentary proof of the ownership of the assets to be secured again the loan