Business funding

[enos]

why is it difficult to get funding when you have three MOU for trucking business. What am I missing. Confused.

This funding agencies can be a pain in the back sometimes.


Please advice what do i really need to secure and guarantee funding for truck purchase.

My MOU's have expired now. I want to give it one more go before throwing in the towel in trucking business.

[Dave A]

First problem normally is a lack of collateral. This will eliminate a lot of potential funding sources.

With what remains - If there's a clear history of business failure for people holding similar MOU's, you're probably also banging your head against a brick wall.

[Greig Whitton]

why is it difficult to get funding when you have three MOU for trucking business.

Because it is a high risk investment. You're tying up a lot of money in depreciating assets that may be stolen, damaged, or under-utilised.

There is a world of difference between buying capital assets and building a sustainable, profitable business. Investors are interested in the latter, not the former.

Please advice what do i really need to secure and guarantee funding for truck purchase.

For starters, I would recommend focusing less on the trucks and more on the business. Investors want to see:

(1) A believable growth strategy that will ...
(2) Capitalise on an overlooked market opportunity, with ...
(3) A plan for mitigating clearly identified risks, that will be ...
(4) Executed by an experienced leadership team with a track record of success.

As Dave correctly points out, some investors will want to see collateral as well (although public funding agencies are usually more risk tolerant).

[Blurock]

Enos, some financiers call trucking "Trane sport" because if you get it wrong, you may cause a lot of tears to a lot of people.

Bankers are essentially very good gamblers. They will never put any money on a bet where the odds are against them. They study the trends and have excellent data bases with statistics that will make your mind boggle. Their records show that inexperienced operators have a higher failure rate. Business with high gearing (Under financed with high debt ratios) have a greater failure rate.

Because of the high risk in the transport industry, the banks are not keen to finance and you will find it very difficult to raise funding for any new venture in this industry.

[daisyli]

"banging your head against a brick wall."

[Violeta Sirakova]

Its too hard to get venture capital funding as a startup. Try to convincing a bank maybe the best idea.