Welcome to our first post of 2026.

As we start the year, we want to address one of the most common — and most misunderstood — issues we see across the market:
why businesses fail to secure funding, even when the owner believes they are “doing everything right.”

We work with two very different groups:

• Small and mid-sized businesses seeking operating capital, growth capital, or credit-based funding
• Larger companies pursuing $1M+ raises through private investors, family offices, private equity, or structured debt

While the funding mechanisms differ, the root causes of rejection are surprisingly consistent.

The Core Problem: Most Businesses Don’t Think Like Capital Providers

Business owners tend to approach funding emotionally:

• “I need capital to grow.”
• “I’ve put years into this business.”
• “Revenue is coming.”

Lenders and investors approach funding analytically:

• Risk
• Predictability
• Control
• Proof

If you don’t understand how they evaluate risk, you will continue to hear “no” — often without a clear explanation.

What Lenders and Capital Sources Actually Evaluate

Regardless of deal size, most funding decisions come down to five core factors:

1. Cash Flow Discipline

Revenue matters. Cash management matters more.
Negative balances, overdrafts, and erratic deposits are major red flags — even when revenue looks strong on paper.

2. Financial Hygiene

Clean financials signal operational maturity:

• Accurate bookkeeping
• Filed tax returns
• Clear separation of personal and business finances

3. Use of Funds

Capital providers want specificity — not vague explanations.
“General working capital” without detail is a weak answer.

4. Repayment or Return Logic

Lenders ask: How do we get paid back?
Investors ask: How do we make money — and how do we exit?

5. Management Credibility

Capital follows execution. Experience, discipline, and decision-making matter — especially in larger raises.

Practical Tips for Small Businesses Seeking Growth or Operating Capital

• Never let your business bank account go negative.
• Maintain a consistent cash buffer.
• Completely separate personal and business finances.
• Know your monthly revenue, expenses, and net cash flow.
• Be honest about readiness — preparation often beats premature application.

Guidance for Companies Pursuing Larger Capital Raises ($1M+)

Larger raises are not bigger loans — they are structured financial transactions.

Successful raises require:

• A clear growth narrative
• Defensible unit economics
• Scalable operations
• Professional-grade materials (deck, financials, projections)
• A realistic capital structure

Most raises fail not because the idea is bad, but because the company is improperly positioned for the type of capital it is pursuing.

The Bottom Line

Capital is not scarce.
Prepared, credible opportunities are.

If you want funding, you must align your business with how capital providers think — not how founders hope they think.

Call to Action

If this article raised questions about your business’s fundability, that’s a good thing.

At IG&P Consulting, we help businesses:

• Prepare for funding
• Identify the right type of capital
• Avoid wasted applications and credibility damage
• Position themselves correctly for lenders, investors, and capital partners

If you’re planning to pursue funding in 2026 — or want clarity on what’s realistic for your business —
let’s have a conversation.

Schedule a consultation or contact us to discuss your next growth phase.