Business Funding Guide

Vector of a piggy bank with a single coin being added. Represents managing and tracking funding as a business owner.

How to Manage Business Funding After You Receive it

Kody Wirth | May 25, 2023

Securing funding is just the beginning. How you manage it can make or break your business. It may even influence your chances of getting additional funding later on. Whether it’s a loan, grant, line of credit, or investor financing—you need a plan to leverage these resources in a way that fuels your growth and makes your business sustainable.

In this comprehensive guide to managing business funding, we’ll go over practical strategies for using and tracking funding to ensure every dollar works as hard as you do. 

Why you need to carefully manage business funding

If you’re pursuing funding, you should have a section in your business plan that explains how you plan to use the money you’re requesting from lenders or investors. This “use of funds” section can be a spreadsheet, a forecast, or simply a few paragraphs of text. 

Once you have that cash in hand, it’s tempting to think that your business plan has done its job, and all you have to do is use the money. But here’s the issue: things have likely changed and will continue to change since you asked for funding.

If you stick with your original plan and choose not to revisit how you’re using funds—you’re more likely to make costly mistakes. That’s why you need to take the time to review, make adjustments, and track how these changes differ from the original plan in your funding request. 

That way you are making the most out of your newly introduced cash and can easily showcase how it’s being used to any external stakeholders.

How to use your funding 

You can use external funding to grow your business in countless ways. What you choose fully depends on your business stage, the potential for growth, and how well you understand your financials. Here are a few tips and specific ways to manage funding for business growth initiatives. 

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5 tips to get the most out of your funding

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No matter how you intend to use your business loan, line of credit, grant funding, or investment—there are consistent funding do’s and don’ts that you should be aware of.

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Develop a hiring strategy after a round of funding

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It can be tempting to jump right into expanding your team when you’re flush with cash. Additional employees can accelerate growth as long as you make the right hiring decisions and don’t bring on too many employees.

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Funding management resources and tools

Check out our selection of free templates and recommended resources to help you stay on top of your funding long after you receive it.

Doc Template 1

Free one-page business plan template

Try a business plan format built to help you quicly review and revise your strategy.

Download Template
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Manage and grow your business with a single tool

LivePlan not only prepares you to raise funding but helps you understand how to run your business with intuitive financial forecasting and performance management features.

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Business funding management FAQ

After getting funding, you should develop a comprehensive plan, or update your original funding plan, to utilize the funds effectively. Prioritize high-impact areas specific to your business like product development, marketing, hiring, and infrastructure. You should regularly review your financial status and communicate updates to your investors.

Managing borrowed funds involves careful budgeting, monitoring, and reporting. Allocate funds based on your business plan, monitor usage to ensure it aligns with your goals, and report on fund utilization to stakeholders or lenders regularly.

The use of funds refers to the detailed allocation of financial resources from a lender, investor, line of credit, or other funding sources. It explains how the business intends to spend its capital to achieve its objectives, such as product development, marketing, hiring, or purchasing equipment. This can be a simple statement, financial forecast, or more detailed financial plan.

Financing typically refers to the process of obtaining capital through debt (like loans) or equity (like shares). Funding is the act of providing resources, usually in the form of money, or other values such as effort or time, to finance a need, a program, or a project.

Money received through funding efforts can be used for various activities that drive business growth such as product development, hiring talent, marketing and sales efforts, research and development, buying necessary equipment, or expanding into new markets. What you choose to use it for should be planned out in advance and fall in line with your overall business goals.