Whether you want support for your ambitious growth plans or to ease your working capital issues, it can be an attractive idea to submit an application for external funding. This may be a grant, a loan (debt) or external investment in return for equity.
It can be extremely frustrating, but there are two very common reasons for funding applications being rejected:
- You didn’t fill in the application correctly
- The funder didn’t have confidence in your ability to deliver
So how do you avoid these pitfalls?
Filling in the funding application correctly
You should be able to get this right when you pay attention. However, it’s very easy to miss something, so don’t ignore the first rule below just because you don’t have time. It’s the best way to catch any mistakes before they become a problem.
1. Line up someone to review your application
Ask a friend, colleague or trusted adviser if they will read the funding application once it’s done. But you can’t wait until the night before it’s due and then spring it on them.
Plan backwards from the deadline and allow enough time for the person to read carefully, and then enough time for you to change things based on their feedback. Cut your own time spent on the first draft if you have to – this is more important.
2. Check the eligibility criteria carefully – and then again
If you get this wrong, everything else is wasted. There are always restrictions on:
- who you are – sector, size, time in business, corporate structure etc
- how much you can ask for
- what you want the money for
When you are applying for multiple grants or investments, it’s easy to overlook a detail. If need be, print it out and physically tick off each item. I’ve reviewed an application before now and missed the small print that was different to last time and made us ineligible. The whole application was wasted and we could only blame ourselves.
3. Make a great case for yourself
The section asking you to describe your plans is vital. Focus on the benefits you are offering, and the outcome for both your end customers and your funder. The technical details of how your product or service will work can come later.
For end customers: what difference will your product or service make? Why would people want to buy it? Why would they want yours ahead of anyone else’s?
For the funder: think about their priorities. Is it to fulfil a particular objective (eg to support tech startups in the Liverpool City Region)? Or are they commercially focused on low risk for their investment and a good return rate? How will your proposal help them achieve their aims?
Use concise and specific words to make a compelling argument. Assume that your audience are intelligent but uninformed about your sector. Avoid jargon, or explain it as you go.
Use quotes or statistics where they strengthen your case, but add footnotes linking to sources to ensure credibility.
4. Be realistic
Funders read hundreds of applications. Even without knowing your business, they have a fair idea of how much time and money things usually take.
If your budgets or project plans are too optimistic, they will be sceptical. Ensure you have covered all types of costs, and sanity check your sales assumptions – because they will. Think about what might go wrong, and allow for contingency as well as lead times to ramp up resources.
Check when funding will begin. Usually any work done before award (or maybe even payment) is excluded, so don’t plan to invest too heavily before a decision is made, which may take longer than you hoped.
Funders will also look at who else is sharing the risk. If you are so confident you will succeed, will you back that with your own money? Not many people will risk their home on even a great plan (myself included), but if you won’t take any risk, why should they?
If you haven’t had funding before, start with a small request and work your way up as you gain a reputation for performing well against your plan.
5. Answer all the questions
Check the question wording carefully to ensure you haven’t missed the point and answered something they didn’t ask. It’s easy to get carried away in your enthusiasm for your plans and fail to provide the information being asked for.
Avoid the temptation to put “as above”, even if you think you have already answered a question once. Make it as easy as possible for the reviewer by answering each question in its own place.
Similarly, avoid just putting “see attachment”. Instead, put a summary into the answer box and use the attachment as extra information for more detail.
Check the list of supporting documents required and double-check you have included them all. And check they are accurate, complete and up to date.
I recently assessed an application that required someone to prove they were a non-commercial organisation, and was a bit surprised to open the certificate proving that their milking machines had met safety regulations the year before. I was expecting a certificate proving they were an regulated charity, so this was not quite what I was looking for and an instant red flag about their attention to detail.
6. Challenge your reviewer to spot all your mistakes
Your reviewer needs to know they are not a cheerleader and that it’s a disservice to be kind about any mistakes they find. They need a forensic red pen to highlight:
- typos and grammatical errors
- confusing answers
- mismatches between the question and the answer
- inconsistencies between numbers in different parts of the application
- assumed knowledge – this works best if they are not a close colleague
- missing, outdated or incomplete attachments
Any and all of these errors will weaken your funding application, so make sure you leave enough time to fix them before the deadline.
What if I do all this and my funding applications is still rejected?
There is huge demand for grants, so don’t worry too much if you don’t get the award, or just get a fraction of what you requested. Ask for feedback to see what you can learn, but you may just be unlucky.
If a loan or equity investment application is rejected, you definitely need feedback. Did you follow the 6 rules above? If you were unrealistic or sloppy, or the funder had to chase up for additional information you left out, they will have less confidence in your ability to deliver.
If your management team cannot put a good project plan together, or don’t have well-managed policies, will they deliver the promised growth?
Whereas a well-presented, compelling case with consistent numbers and high-quality supporting information inspires high confidence from the funder in the management team and is far more likely to be approved.
“I may need help with that”
If you are struggling to get funding, you may just need help reviewing your funding application. Or you may need to take a step back and assess the capability of your management team. Are you truly investment-ready?
I can help in either case. With a reputation for a fierce red pen, I can be an external reviewer to pick up mistakes before submission. Or I offer training and will be a trusted adviser, to raise capability in your management team and prepare them for growth.
Get in touch and book a 15 minute initial chat if you’d like to explore options to help you grow and get funding approved. It doesn’t have to be painful with the right assistance.