Expert Insights: Alternative ways to secure capital to grow your business where ownership in your family enterprise is not part of the equation and the time it takes to effect these arrangements.

February 7, 2019

Question:

What are alternative ways to secure capital to grow your company where ownership in your family business is not part of the equation?  

Answer:

A sale leaseback is often the answer if a substantial portion of your underlying business assets are represented by unencumbered real estate. It’s possible to obtain a very high percentage of the asset value in cash for a long-term monthly payments. The same is available for business equipment although shorter in duration.  Off-balance sheet project financing arrangements with third parties are also well suited for standalone projects or expansions such as new restaurants, factories or even the launch of a new product. They provide growth capital without directly impacting your balance sheet or becoming a shareholder in the core business.

Question:

How much time should be allotted for the process of financing for my business?  

Answer:

A financing will invariably take longer than anticipated – often six months – and a year or longer for equity.  You’ll have to identify the right structure for the targeted financing source and prepare the necessary materials. Not all financial institutions will meet your needs as they have different specializations and requirements with respect to the capital they extend.