There are multiple stages of business development where you may need to seek additional sources of funding. While all of these can be stressful to navigate, it’s perhaps particularly difficult to know where to start with fundraising for your business during times of fiscal ill health.

Depending on whether you’re going through a restructuring process or trying to deal with cash flow issues, you may have to take a slightly different approach. For those who find their business in this kind of situation, here’s how you can start with the fundraising process.

Assessing Your Position

The first thing you’ll need to do before you actually start to identify potential sources of funding is assess your business’s financial position. If you’re in decent financial health but still need to free up cash flow to deal with a costly issue, fundraising could be appropriate.

If, on the other hand, your position has been steadily tanking and you’re now borderline insolvent, it could be legally irresponsible to seek even more credit. It’s important to consult an insolvency expert, whether you’re facing a winding up petition or otherwise, to see if fundraising is appropriate and, if so, how you should navigate it.

Develop a Strategy

If seeking additional funding is the right thing to do, you need to come up with a clear plan. This is necessary both to ensure the optimal use of these funds and to show potential creditors that you’re a trustworthy recipient.

You’ll need to account for all of the funding you are to receive. It will add to your debt, and if you’re not careful, could end up leaving your business in an even worse situation than it’s currently in. Make sure that you work with a business recovery strategist, as you likely won’t have time to waste on trial and error.

Seek Funding

Once you have a strategy to show potential creditors, you can start to seek funding. There will be a number of potential avenues to do so, including government-backed loans, commercial banks, asset-based loans, which use your assets as security, and private investors.

Each of these will come with advantages and drawbacks, and you’ll need to see which suits your needs the best. You’ll have to give up something to receive funds – you just need to decide whether it’s worth it or not in the long run based on the impact those funds can have on your business.

Ensure Ongoing Diligence

Once you’ve received the necessary funding, you can’t become complacent. You need to make sure that you’re incredibly diligent in implementing your strategy, with regular assessments to check that it’s working as intended. You don’t want to waste this important opportunity, especially if failure now could spell disaster for your business’s future.

Taking your business out of a financial black hole is no mean feat, and it’s not something that you want to take lightly. By working with a suitable business recovery specialist and coming up with a well-thought-out recovery strategy, you can maximise the chances that you’ll get your business through this tricky period.