Before you borrow: a business funding checklist.

A funding offer can make a business feel one step closer to launch. Start with a smaller question: what specific gap would the money close, and what cash would repay it?

This checklist helps you put the offer beside the business you actually have. Use it before comparing a credit line, a loan, or another source of working capital. Borrowing creates a repayment obligation; it does not prove that customers want the offer.

1. Name the cash gap.

Write down one use, one amount, and one date. “Pay for a confirmed order before the customer pays” is easier to assess than “fund growth.” Separate essential delivery costs from experiments and purchases that can wait.

• Inventory: Which orders or demand evidence support the purchase? What happens if stock sells slowly?
• Payroll or contractors: Which committed work supports the expense? When is the customer expected to pay?
• Equipment: Could renting, sharing, or a smaller purchase serve the next customer?
• Marketing: What have you already learned from a small test? What is the maximum loss you can absorb?

If you are still validating the idea, make the next test small enough to learn from without assuming a new credit limit. Our idea-validation guide can help define that test.

2. Put repayment on the calendar.

List opening business cash, expected collections, operating costs, taxes, owner withdrawals, other cash outflows, existing debt payments, and the proposed new payment for each week or month. Use the frequency the provider actually requires.

A useful planning equation is: opening cash + cash collected − all cash outflows (including operating costs, taxes, owner withdrawals, and debt payments) = closing cash. An invoice, a projected sale, and cleared cash belong on different lines.

Run a second version with your largest expected payment arriving late and sales below your forecast. Record the lowest cash balance and the reserve you need to keep operating. If repayment depends on everything going right, reduce the proposed borrowing or revisit the plan.

3. Compare the complete offer.

Ask each provider for written terms for the same amount and intended repayment period. A large advertised limit is only one part of that comparison.

• What you receive: Approved limit, initial draw or advance, and cash available after any deductions.
• What you pay: Interest or other pricing method, all mandatory fees, and total repayment in dollars under the proposed schedule.
• When you pay: Payment amount, daily/weekly/monthly frequency, first due date, and whether payments or rates can change.
• What you commit: Any personal guarantee, collateral, lien, automatic withdrawal, or restrictions on the use of funds.
• What changes the cost: Late payment, early repayment, renewal, unused-line charges, and any minimum borrowing requirement.
• Who decides: The actual funding provider, eligibility criteria, and how credit checks work at the initial review and later application stages.

Keep approval timing separate from when usable funds reach your account. Ask which steps must be complete before either clock starts.

4. Compare a smaller commitment.

Put at least one alternative beside the funding offer. You might phase the purchase, negotiate supplier timing, use a customer deposit with clear delivery and refund terms, or deliver a smaller paid pilot first. Each option has obligations and tradeoffs; write them down.

A credit line may be worth comparing for a recurring timing gap. A fixed borrowing arrangement may be worth comparing for a defined purchase. Neither structure removes the need for a credible repayment source. Choose by the business need and written terms, not by the largest number available.

A research note on Tomo business credit.

Tomo also has an official partnership page for creators. It does not publish commission rates or establish that the business-credit offer is included. Publisher approval, eligible products, tracked links, and payment terms would need separate confirmation. A partnership enquiry is separate from an application for business funding.

5. Decide what would make this a yes.

Complete one sentence: “This funding would let us deliver ___, with repayments covered by ___, while keeping at least ___ available for essential costs.” Mark every unverified assumption.

If you cannot fill in the repayment source, your next step is more evidence or a smaller commitment. If the numbers work, ask for the missing terms and compare the written offers before deciding. Keep a dated copy of what the provider actually offers you.

Still shaping the business? Start with a one-page plan.