A brilliant business idea, a talented team, and eager customers are key ingredients for success—but without the right capital, even the best startups can stall. From raising your first round of funding to optimizing debt and equity for future growth, navigating financing challenges is critical at every stage of your company’s journey.

Here are five actionable strategies to help you secure capital, manage economic uncertainty, and build strong relationships with lenders and investors.

1. Explore Non-Dilutive Financing Options First

For startups, securing financing often feels like a balancing act between growth and ownership. While venture capital (VC) may seem appealing, it often comes at a significant cost: sacrificing equity and control.

Instead, consider creative non-dilutive financing options that allow you to maintain ownership:

  • Strategic debt financing: Though short-term costs may be higher, structured loans can provide the capital needed without diluting equity.
  • Revenue-based financing: Repayment tied to revenue can give startups flexibility during early growth phases.
  • Grants and incentives: Industry-specific grants and local government incentives can offer valuable funding without ownership strings attached.

When to pivot: As your business matures, you gain leverage. Lenders and investors begin to compete for a share of your company’s capital stack. Business advisors can help identify the right time to transition to larger-scale, more efficient financing opportunities.

2. Prepare for Economic Cycles to Impact Your Lending Options

The capital landscape is never static. Whether you’re seeking debt or equity financing, the economic cycle will influence your options.

  • During strong economic periods, lenders may compete to fund your business, offering favorable terms.
  • In downturns, financing tightens. Even profitable companies may face unexpected challenges, such as lenders exiting specific sectors or tightening credit terms.

Proactive planning is essential:

  • Build relationships with alternative lenders before you need them.
  • Diversify your financing sources to stay nimble.

Example: If a long-term banking partner decides to exit your sector, having a backup plan allows you to pivot quickly.

3. Align Debt and Equity with Your Growth Projections

Ambitious growth goals are essential for any business—but achieving them requires clear, realistic financing plans.

Ask yourself:

  • How much debt and equity will it take to grow by X% over Y years?
  • Do current lending agreements (like debt covenants) align with these goals?
  • What’s the cost of capital in achieving this growth?

Work with advisors to forecast growth scenarios that incorporate your financing obligations. This ensures your company stays on track without overleveraging or missing lender benchmarks.

4. Tackle Lending Challenges Proactively

Not every business plan unfolds perfectly. As your company grows, you may face unexpected setbacks that impact your ability to meet financing obligations. The worst mistake? Ignoring the problem.

Be proactive:

  • Communicate early and transparently with lenders and stakeholders.
  • Share not only what went wrong but also the corrective actions you’re implementing.

Investors and lenders value solutions, not surprises. Addressing issues head-on helps maintain trust and keeps your financing partnerships intact during challenging periods.

5. Understand What Lenders and Investors Want to See

Strong relationships with lenders and investors require more than introductions—they require understanding how to “speak lender” and provide the information they value.

Lenders look for:

  • Clear financial reporting: Regular, objective reporting on performance, growth, and risk.
  • Financial literacy: Demonstrating an understanding of metrics, projections, and financial obligations.
  • Proactive communication: Confidence that you’ll identify and address problems before they escalate.

Advisors play a key role here, bridging the gap between your business and lenders by presenting your financials in a way that aligns with lender expectations.

Unlock Your Business’s Growth Potential with Expert Guidance

Navigating the capital challenges of startups and growing businesses can be complex—but you don’t have to go it alone. At LGA, we specialize in helping businesses like yours secure the financing they need while protecting their ownership, optimizing debt and equity, and building strong investor relationships.

Whether you’re bootstrapping a startup, securing your first major loan, or preparing for strategic growth, we’re here to guide you.

Explore our case studies to see how businesses have unlocked their growth potential with our support, and contact us today to discuss your financing strategy.