You’re in the early stages of building your dream to create a bold new vision for the future.
You’ve cultivated an amazing team – they’re dedicated, committed, and motivated.
Your business model is solid – it’s producing recurring revenues. You have tangible assets.
But now you need cash to fuel your business growth. As a founder you can reach out to Venture Capital markets – and they may be the right fit – but how much equity are you willing to give up?
Something Founders should consider exploring and learning more about is Non-Dilutive Debt Financing.
Non-Dilutive Debt Financing protects your shareholders’ equity and control, and can provide a creative solution to fuel your growth.
8 Non-Dilutive Debt Financing solutions that entrepreneurs should consider when evaluating their business plan:
- Working Capital – You need to fund new sales and marketing initiatives, or perhaps you need to expand your operations – a working capital loan with flexible terms can help scale your business.
- Equipment & Software Leasing – Do you need new hardware, machinery, or software? Leasing can provide better cash management. Equipment & Software Leasing can provide terms from 12 to 84 months, ranging from $2.5k to $10M plus.
- “As-a-Service” Financing – Are you providing software, hardware, or services as a monthly cost? As-a-Service Financing can help bring revenue forward, and can be customized to meet the goals of your business.
- Factoring / Invoicing Discounting – Do you have committed contracts or invoices, but you won’t receive payment for 30, 60 or 90 days? Factoring / Invoicing Discounting can provide advances up to 95% of the contract value to improve cash flow.
- Purchase Order (PO) Financing – You have a PO, but you require an immediate cash injection for inventory or production costs. PO Financing can structure non-dilutive debt financing solutions to inject cash into your business, based on the mechanics of the PO with your client(s).
- Term Loans– You’re an established business, you own equipment or real estate assets, and you have a solid balance sheet. Term loans can provide your organization with fixed-asset financing with terms to match your business objectives.
- Credit Cards: Business credit cards are a great way to pay suppliers/vendors and leverage your existing line of credit available through your credit card. Using a business credit card will also help build your corporate credit history.
- Research & Development Financing – You’ve received an R&D grant, but now you have to wait weeks or months for the funding to arrive. R&D Financing provides your company with advances up to 95% of the grant to quickly inject cash into the business.
This post was written by Michael Stefanison (Chief Entrepreneur Officer of BuildingTheNextUnicorn, a Founder Institute partner organization. Building the Next Unicorn focuses on the startup community by providing proven and innovative non-dilutive debt financing solutions as instruments to help shareholders retain their equity while fuelling business growth.
