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Whether your company generates $500,000 in revenue or $500 million, the common goal for most executives and business owners is growth. When people think about growing their company, they often assume that bringing in financial partners—whether through venture capital or private equity—is the only option. However, the idea of giving away equity and losing some control over the business can be unappealing to many owners and executives. Fortunately, there are several ways to finance company growth without diluting ownership or giving up equity.

In this blog, we’ll explore three of the best strategies to grow your business without selling equity: leveraging commercial credit, business development, and revenue-based financing. Each option offers unique advantages and flexibility, depending on your company’s financial needs and growth goals.

Commercial Credit

Commercial credit is an excellent financing alternative for businesses looking to grow without selling equity. It allows companies to access senior or subordinated loans that can be used to fund expansions, enter new markets, introduce new products, or make significant acquisitions—all while maintaining complete ownership.

The qualifications for commercial credit vary widely depending on the type of financing and the financial health of the borrower. A business with strong cash flow may qualify for one type of loan, while a company with valuable assets may qualify for another. Here are some of the most common forms of commercial credit:

Term Loans

Term loans provide a lump sum of capital that is repaid over a fixed period, often with a blanket lien on the company’s assets. These loans are particularly suitable for businesses that have tangible assets, such as property, equipment, or inventory, to offer as collateral. Term loans allow businesses to secure capital upfront and pay it off gradually, making them ideal for long-term growth projects or significant acquisitions.

Cash Flow Loans

Unlike term loans, cash flow loans are based on the borrower’s cash flow rather than physical assets. These loans work well for companies with strong, predictable cash flow but limited collateral. Cash flow loans provide the flexibility to fund growth initiatives, bridge working capital gaps, or finance seasonal business needs.

Equipment Financing

Equipment financing allows companies to purchase or lease essential equipment needed for growth. Lenders may buy the equipment and lease it back to the company or offer financing secured by the equipment itself. This type of credit is particularly beneficial for businesses where new machinery or technology can drive immediate revenue or profit growth.[/av_one_third]

Factoring

Factoring involves selling a company’s receivables to a lender at a discount. The lender provides immediate cash in exchange for the right to collect payment on those receivables. Factoring is a great option for businesses with a steady stream of receivables that need quick access to working capital to fund operations or growth initiatives.

Accounts Receivable Financing

Similar to factoring, accounts receivable financing provides loans based on the company’s outstanding invoices. Unlike factoring, the receivables are not sold to the lender, and the business retains control over collections. Any amount collected over the loan value is returned to the company, making this a flexible financing tool for short-term working capital needs.

Inventory & Purchase Order Financing

This type of financing is a revolving line of credit that allows businesses to fund inventory or purchase orders. It’s especially useful for companies experiencing rapid growth or preparing for a large order, as it provides the capital necessary to fulfill customer demand without tying up cash flow.

Business Development

Business development is one of the most underutilized methods of achieving growth without requiring external funding. It involves building strategic relationships with other companies, individuals, or entities to create mutual benefits. While business development doesn’t provide immediate capital, it can lead to partnerships, expanded market presence, and increased revenue over time.

Companies engage in business development for several reasons, including:

  • Attracting new clients, vendors, or distribution channels
  • Increasing sales to existing customers
  • Accessing new technologies or product innovations
  • Expanding geographically
  • Improving operational efficiency through strategic partnerships

Here are some common types of business development relationships that can drive growth:

Partnerships

Strategic partnerships allow two or more companies to collaborate for mutual benefit. These partnerships may involve co-marketing efforts, shared technology development, or joint product launches, enabling companies to achieve growth that might be difficult or costly on their own.

Commercial Relationships

Developing strong relationships with new and existing clients, vendors, or distributors can increase sales and improve supply chain efficiency. Expanding your commercial network helps your company reach new customers and streamline operations.

Licensing Agreements

Through licensing, a company can either monetize its own intellectual property or gain access to third-party technology to improve its products and services. Licensing arrangements are a cost-effective way to innovate without the need for significant R&D investments.

Human Capital Relationships

Talent is one of the most valuable resources for growth. Business development efforts can focus on recruiting experienced executives, board members, or advisors who bring critical expertise and connections to the company.

By leveraging these business development strategies, companies can create new revenue streams, improve their competitive position, and achieve sustainable growth without seeking equity funding.

Revenue-Based Financing

Revenue-based financing (RBF) is a flexible, non-dilutive funding option that provides capital in exchange for a percentage of future revenue. Unlike traditional loans, RBF doesn’t require fixed interest payments, nor does it involve issuing equity or giving investors control over the business. Instead, repayment is tied directly to the company’s revenue performance, offering a highly adaptive financing model.

  • Advantages of Revenue-Based Financing
  • No Dilution of Ownership: RBF allows companies to raise capital without giving away equity or board seats, ensuring founders and existing shareholders retain full control.
  • Flexible Payment Structure: Payments adjust according to revenue fluctuations, making RBF a low-risk option for businesses with seasonal or inconsistent revenue streams.
  • Quick Access to Capital: The RBF approval process is faster than that of traditional loans or equity financing, with many deals closing within four weeks.
  • No Burdensome Covenants: RBF agreements typically come without restrictive covenants, giving businesses the freedom to operate as they see fit

Ideal Candidates for RBF

Revenue-based financing works well for businesses with steady and predictable revenue, such as SaaS companies, subscription-based businesses, and other industries with recurring revenue models. It’s also a great option for companies that need growth capital but want to avoid the complexities and time constraints of equity or traditional debt financing.

Conclusion

Growing your business without giving up equity is not only possible but, in many cases, preferable. Whether you choose commercial credit, strategic business development, or revenue-based financing, these methods allow you to maintain ownership while securing the resources needed to scale. By exploring these options, your company can achieve its growth objectives while preserving control and maximizing long-term value. If you’re unsure which option is best for your business, consulting with experienced advisors can help you make an informed decision. At ClearThink Capital, we specialize in helping businesses explore non-dilutive financing options and execute strategic growth plans. Reach out to us today to learn more about how we can help you achieve your growth goals.

For small and medium-sized companies, maintaining healthy cash flow is crucial for sustaining growth and managing day-to-day operations. However, unpaid invoices often tie up critical working capital, creating financial bottlenecks that can slow business growth or even threaten its survival. This is where accounts receivable financing can play a pivotal role.

Accounts receivable financing is a type of loan that allows a company to leverage its unpaid invoices as collateral to secure funding. Instead of waiting 30, 60, or even 90 days for customers to pay their invoices, businesses can access immediate cash to meet their financial needs, pursue growth opportunities, and maintain operational efficiency. For companies looking to finance growth, this option can be a game-changer, providing a steady stream of working capital without taking on excessive debt or diluting equity.

How Accounts Receivable Financing Works

The mechanics of accounts receivable financing are relatively straightforward. A company with outstanding invoices turns to a lender who assesses the value and collectability of those invoices. The lender then provides a percentage of the invoice amount upfront—typically 70% to 90%—as a loan, with the remaining balance minus fees released once the invoices are paid. This process gives businesses the flexibility to continue operations, fund payroll, purchase inventory, or finance new projects without waiting for their customers to settle their accounts.

Accounts receivable financing is particularly attractive for companies that experience seasonal fluctuations in revenue or operate in industries where long payment terms are standard, such as manufacturing, retail, and logistics. By converting unpaid invoices into quick cash, businesses can stay ahead of expenses and focus on achieving their strategic goals.

Alternative Lenders: A Flexible Option

When small and medium-sized businesses don’t meet the stringent credit or collateral requirements of traditional bank loans, alternative lenders offer a viable solution. At ClearThink Capital, we specialize in introducing companies to these alternative lenders, who are often family offices or specialized funds. Unlike banks, which tend to have rigid structures, alternative lenders provide more flexibility in terms of financing structure, interest rates, and repayment terms.

This flexibility makes accounts receivable financing accessible to a broader range of businesses, particularly those with inconsistent cash flow, limited credit histories, or unconventional financial structures. Alternative lenders are typically more focused on the quality of the receivables and the creditworthiness of the company’s customers, rather than on the borrowing company’s balance sheet.

How ClearThink Capital Works

At ClearThink Capital, we take a unique approach to helping businesses secure accounts receivable financing. Unlike some competitors, our compensation is generally derived solely from our client companies, not from referral fees or commissions from lenders. This means we are fully aligned with our clients’ best interests and incentivized to secure credit financing on the most favorable terms.

Our goal is to ensure that our clients not only gain access to the funds they need but also benefit from financing structures with limited or no covenant restrictions. This approach allows businesses to operate with greater financial flexibility and confidence.

What Accounts Receivable Lenders Look For

When evaluating whether to finance a company’s accounts receivables, lenders consider several critical factors. Understanding these can help businesses prepare and position themselves as attractive candidates for financing:

1. Contracts and Purchase Orders

The validity and enforceability of the contracts or purchase orders tied to the receivables play a crucial role in a lender’s decision-making process. Lenders will often review these documents to ensure there are no ambiguities or risks that could hinder the company’s ability to collect payment. Clear, well-drafted contracts increase the likelihood of approval and can also lead to more favorable financing terms.

2. Creditworthiness of the Obligors

One of the most important considerations for an accounts receivable lender is the creditworthiness of the customers who owe the invoices. Even if the borrowing company has a limited credit history or operates in a high-risk industry, having reliable customers with strong credit profiles can significantly boost the chances of securing financing. Lenders may even offer lower rates if the obligors are large, reputable companies or institutions.

3. Time to Payment

Accounts receivable lenders typically finance invoices with payment terms of up to 90 days. Invoices with shorter payment cycles are generally seen as less risky, which can result in faster approvals and better rates. For businesses with longer payment terms, it’s important to evaluate whether their receivables fit within this time frame before seeking financing.

4. Existing Liens

If the company already has liens on its assets, this could impact the lender’s ability to finance its receivables. However, many alternative lenders specialize in structuring accounts receivable lines even for businesses with existing liens. Companies should work closely with advisors like ClearThink Capital to identify lenders who can navigate these complexities and craft a workable solution.

Advantages of Accounts Receivable Financing

There are several reasons why accounts receivable financing has become a popular option for businesses looking to improve cash flow without incurring additional debt or diluting equity:

  • Improved Cash Flow: By converting unpaid invoices into immediate cash, businesses can cover operational expenses, invest in growth initiatives, and avoid financial disruptions.
  • No Equity Dilution: Unlike raising capital through equity financing, accounts receivable financing allows business owners to maintain full control of their company.
  • Fast Access to Capital: The approval and funding process for accounts receivable financing is typically much faster than traditional bank loans, making it ideal for time-sensitive needs.
  • Flexible Financing Options: Alternative lenders offer customizable terms to meet the specific needs of each business, providing greater flexibility than banks.
  • Growth Without Debt: Since accounts receivable financing is based on existing invoices, it allows businesses to grow without taking on long-term debt obligations.

Is Accounts Receivable Financing Right for Your Business?

For businesses with cash flow challenges due to delayed customer payments, accounts receivable financing can be a lifeline. However, it’s essential to carefully evaluate your company’s financial situation, customer base, and specific needs before pursuing this option. Partnering with an experienced advisor like ClearThink Capital can help you navigate the process, identify the best lenders, and secure favorable terms that support your growth objectives.

Accounts receivable financing offers a powerful tool for businesses to unlock the value of their unpaid invoices and fuel their growth. Whether you’re dealing with seasonal revenue fluctuations or need immediate cash to seize a new opportunity, this financing solution can provide the working capital you need to move forward with confidence. Contact ClearThink Capital today to explore how accounts receivable financing can support your company’s success.

Perhaps the most important aspect of any corporate transaction, whether a private offering of securities, a public offering, a merger or acquisition or otherwise, is what is known as “due diligence”.

“Diligence is the mother of good fortune.” – Benjamin Disraeli

The Basics of Due Diligence

Due diligence requires the review of all material documents and other information with respect to a company in order to ensure that any disclosures which a company makes, whether in offering materials or an agreement, are true and correct and satisfies any applicable standard of liability.

What does “material” mean?

The Supreme Court has held that something is “material” if there is a substantial likelihood that it would be deemed important by a reasonable investor in making a decision to purchase or sell a company or its stock or as to how to vote their shares.

A due diligence review will inform you as to the material attributes of a company or person, including their commitments, contracts, and liabilities, their business, prospects, financial condition, and results of operations.

  • Does the company exist?
  • Who are the owners?
  • How does the business work?
  • Who are its customers?
  • How do you know that a company has the contracts it claims?
  • How do you know if the projected financial results are based upon accurate and reasonable assumptions?
  • What are the liabilities or contingencies?
  • The answer to these questions, as well as many more, lies with effective due diligence.

Due Diligence for Public and Private Securities Offerings

Securities offerings are governed federally by the Securities Act of 1933, as amended. Pursuant to Section 11 of such Act, as a general matter, if any disclosure with respect to an offering of securities contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading, the issuer of such securities, the officers and directors of the issuer, partners in the issuer, the investment bankers conducting such offering, and professionals retained by the issuer with respect to such offering, are subject to liable for such material misstatements or omissions.

While there are no defenses to the foregoing available to the issuer and only limited defenses available to the members of the board or executive officers of the issuer, the other parties listed above may rely upon what is known as the “due diligence defense”.

The Act provides that it shall be a defense to such liability if such other party had, after reasonable investigation, e.g., a “due diligence review”, reasonable grounds to believe and did believe that the statements in such disclosure were true and that there were no omissions to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

Due Diligence for Mergers and Acquisitions

In the context of mergers and acquisitions, due diligence serves the role of fact finding, disclosure checking, and confirmation, e.g., that the representations and warranties set forth in the operative transaction documents are true and correct.

While the standard of liability in this context can be modified by contract, a due diligence review ensures that the purchaser or purchasers are receiving what they believe to be correct.

Importance of Due Diligence

The failure to engage in a complete and effective due diligence process can be catastrophic and result in substantial litigation.

Below is a list describing some of the greatest due diligence failures of all times and some of the consequences that resulted.

ClearThink Capital’s Due Diligence Process

Any due diligence process is based upon organization: the company subject to the review will need to organize its material documents and descriptions of undocumented material facts so as to provide full disclosure in all material respects.

Although most companies can accomplish this process with little disruption, companies that have not kept complete and organized records and documents may be required to dedicate substantial time to establishing an organization process and adhering to the process.

ClearThink seeks to make the due diligence as easy and simple as possible and provides a form of initial due diligence request list that reflects the organization expected by transaction participants and provides a structure for the categorization of documents.

In order to expedite the transaction process and assure full disclosure, ClearThink does the following:

  • Dataroom: ClearThink will establish for each transaction an organized dataroom in the form expected by the transaction participants and corresponding to our initial due diligence request list.  ClearThink reviews and remediates the due diligence of its client in advance of disclosure to others
  • Report: ClearThink will review all due diligence materials provided by its client, as well as other parties to the contemplated transaction, will document its review, and will make suggestions regarding, and endeavor to assist with, remediation, amendments, or explanation required in order to provide full, fair and accurate disclosure
  • Gatekeeping: ClearThink will act as the gatekeeper to the dataroom, providing access only with the consent of the relevant parties, thereby minimizing the possibility of the compromise of sensitive data

As a philosophical matter, ClearThink is a strong proponent of full disclosure of both positive and negative information.  That being said, proper management of the due diligence process will assure that corrective measures are completed prior to disclosure to third parties, thereby maximizing the probability of a successful transaction.

ClearThink and its principals have extensive experience in the management of due diligence reviews, including reviews relating to 240 public offerings raising an aggregate of $9 billion of public debt and $6 billion of public equity for companies such as The News Corporation Limited, Fox, Comcast, TCI Communications, British Sky Broadcasting, and Liberty Media, among others, as well billions of dollars of mergers and acquisitions.

Planning a corporate or financial transaction? Let’s discuss how we can be helpful. Get in touch with our team below.

When companies are exploring credit financing, they are often overwhelmed by the different options available. Most companies find that their traditional bank does not offer financing that meets their needs and turn to alternative lenders.

Alternative lenders are typically family offices, private equity funds, or other funds that silo off a portion of their capital to lend to growing companies. Depending on the lender, each alternative lender offers slightly different financing structures. These are the most common commercial credit financing structures available to companies:

Commercial Credit Financing Structures Available to Companies

Term Loans

Term Loans are typically secured loans with a fixed interest rate. Generally, Term Loans are paid back over a set period of time. Term Loans can range anywhere from a few months to as long as 10 years depending on a company’s situation.

Cash Flow Loans

Cash Flow Loans are term loans based on a company’s revenue and gross profit. The lender uses the company’s cash flow as collateral for the loan.

Learn more about how we assist companies seeking credit financing ►

M&A Financing

Some alternative lenders focus on M&A Financing. M&A Financing provides a company the capital it needs to complete an acquisition. The structures for M&A Financing can vary drastically depending on the situation. Some lenders will request an equity position as well, while some prefer to lend on a purely debt basis.

Factoring

Factoring loans are structured as credit lines, as opposed to term loans. With a Factoring loan, the lender purchases a company’s receivables at a discount, resulting in the company receives payment from their sales far quicker. The credit strength of the counterparty is highly important to the lender.

Accounts Receivable Financing

Accounts Receivable Financing is similar to Factoring, the main difference being that Accounts Receivable Financing does not involve the purchase of a receivable. Instead, Accounts Receivable Financing is a loan utilizing the company’s eligible accounts receivable as collateral. Just like with Factoring, the credit worthiness of the counterparty is very important.

Mezzanine

Mezzanine Finance is indebtedness that’s junior to the senior indebtedness but is senior to equity. Mezzanine Finance is usually employed in connection with transactions where senior lenders won’t provide the full amount of financing, and there’s a gap between the amount of equity and senior that can be provided and the ultimate purchase price.

Mezzanine Finance is characterized by high interest rates, from the mid teens up to the low twenties, including an equity component generally in the form of warrants or stock. Learn more about Mezzanine Finance ►

ClearThink Capital guides companies through the credit financing process. We put our credit expertise and extensive network of lenders to use for our clients. Get in touch with our team below.

Depending on your company’s situation, different forms of capital may be better than others. This blog will help you decide what form is best for your business.

The Types of Capital

Equity Capital

Equity capital transactions involve an individual or entity purchasing ownership in a company. The company receives funds from the investor, and in return, the investor owns part of your company.

Typical transaction types include:

  • Alternative Public Offerings
  • Self-Listings
  • IPO
  • PIPEs
  • Venture Capital
  • Private Equity
  • Family Offices
  • Private Placements
  • M&A Financings

Advantages:

  • The capital a company receives is permanent capital, and generally does not have to be paid back
  • Equity capital has great flexibility with regard to structure

Disadvantages:

  • Dilution
  • Often used to give preferential or disproportionate rights to investor as opposed to existing stockholders
  • Difficult to remove or eliminate troublesome equity holders

Debt Capital

Debt capital transactions involve borrowing money from a lender, and paying that money back to the lender over a set period of time, as well as interest.

Learn more about what alternative lenders are offering: Commercial Credit: What Alternative Lenders Are Offering

Typical transaction types include:

  • Alternative Commercial Credit
  • Asset-Based Loans
  • Cash Flow Loans
  • M&A Financings
  • Term Loans
  • Factoring
  • Mezzanine

Advantages:

  • Lender does not have vote with regard to corporate matters
  • No dilution
  • The fixed return permits a company to arbitrage between the increase in value the capital will create, and the fixed price they have to pay for that capital

Disadvantages:

  • Has to be paid back
  • Is senior to all equity
  • May restrict actions by existing stockholders

Convertible Debt

Convertible debt transactions involve a loan with the ability for that lender to convert into equity.

Typical transaction types include:

  • Convertible Debt
  • Bridge Financings
  • Mezzanine
  • M&A Financings

Advantages: 

  • Fixed current return
  • Under the right circumstances, does not have to be paid back
  • Very attractive to risk-averse investors

Disadvantages:

  • Dilution
  • Until converted, may restrict corporate actions by stockholders
  • Senior to all equity holders until converted

Wondering what capital is best for your company? Let’s discuss. Get in touch with our team below.

These are the two options for a growing company seeking commercial credit in 2025.

Traditional Banks

While traditional bank financing can be great, emerging growth companies typically cannot obtain traditional bank financing. When a bank reviews a company with high growth, the bank sees risk, but fails to see opportunity. Banks prefer stability to growth, and, as a result, dynamic companies are provided inadequate financing alternatives or no financing at all. In the rare case when traditional bank financing has been made available, it is often insufficient in amount and includes substantial covenant protections, including stringent earnings to fixed charges and financial coverage ratios, and many others.

Learn more about how we assist companies with their credit financings ►

Summary

  • Stability over growth
  • Restrictive, covenant heavy
  • Slow with regard to approval and business development

Alternative Lenders

Alternative lenders are quite different than traditional banks. Alternative lenders are often family offices or funds that have set aside capital to lend to growing companies. Contrary to traditional banks, alternative lenders enjoy working with high growth companies. They provide flexible financing solutions through ABL, purchase order, invoice, inventory, equipment, term loan, and other forms of credit, as well as merger and acquisition finance. Additionally, as they are typically unregulated, they act substantially more quickly and are more nimble with respect to business developments.

Summary

  • Covenant free or light
  • Fast approval
  • Flexible
  • Enjoy working with growing companies

We have been fortunate to meet and develop extensive relationships with a large number of the alternative lenders in the United States. If your company is looking for credit financing, we would love to discuss how we can help you secure the best possible financing for your needs. As ClearThink Capital is generally compensated solely by our client companies and generally does not accept referral fees or commissions from lenders, we, unlike our competitors, are highly incentivized to provide access to credit financing on superior terms with limited or no covenant coverage.

Let’s discuss how we can assist you with your credit financing. Get in touch with our team below.