The use-of-funds breakdown lenders trust
One of the fastest ways to build, or destroy. A lender's confidence is the line that says where the money goes.
Compare two versions of the same $150,000 request:
Version A: "Startup costs and working capital, $150,000."
Version B: "Equipment $45,000; leasehold improvements $60,000; initial inventory $12,000; working capital (6 months) $27,000; marketing & signage $6,000."
Version B reads like someone who's thought it through. Version A reads like a guess. Same amount, completely different level of trust.
Two rules
- Itemize to specific, quotable line items, tie them to real quotes where you can.
- Make the pieces add up to exactly what you're asking for.
The tell
Any single line that's a large "miscellaneous" or "other" is a red flag. Break it down or cut it.
See where your financing file stands
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Check my readiness, freeLenderReady is an educational service, not a lender, broker, or financial advisor. Lending criteria vary by institution and change over time; treat this as a starting point, not a guarantee.