High Growth companies (Gazelles) looking for financing often don’t realize they may be able to finance their company with various forms of creative debt structures. This however is rarely debt you would find at your local bank. These more exotic forms of debt are provided in the capital markets by a whole variety of specialty lenders. These lenders may include hedge funds, insurance companies, SBICs, DBCs, special assets lenders, and many others.
Few entrepreneurs know these groups because their marketing dollars are spent on private equity and buyout firms not entrepreneurs. Why? Because private equity represents serial customers. Unlike your business which may do one financing every three to five years, these groups do 5 or 6 per year.
For companies that have high growth potential, the cost of capital and the differences between debt and equity can be dramatic. That said, it doesn’t mean equity is always the second best choice much of that selection process depends on your company’s own unique situation.
Lantern Capital Advisors helps companies creatively access alternative sources of debt financing outside your local banking relationships.