Once you know your specific financial needs, you will need to identify potential financial providers, and make a formal application. The finance provider will then conduct a desk review (ie a review of papers without interviewing you or visiting your enterprise), and may subject the application to an initial internal decision.
If successful, this initial decision will lead to ‘due diligence’, which is a more thorough analysis highlighting the perceived risks that need to be evaluated and possibly mitigated in the financing structure. This typically includes an on-site visit of the enterprise, as well as a more detailed financial and qualitative analysis of information gathered during the on-site visit.

If all goes well, the provider will then approve your application for funding, having recommended a structure that includes terms such as amount, length or term, product type, pricing/interest rate, conditions that must be met to draw funds, and covenants that must be maintained throughout the life of the funding.

The main goal of financial analysis is to determine whether the enterprise and its business plan are viable and to determine what financial risks may affect the enterprise and put the funds provided at risk. A lender will want to assess the capacity of the enterprise to repay the loan. The financial analysis can impact the financial terms – the amount, the maturity and the conditions under which the funding can be used, as well as the decision whether to provide finance at all.