You’ve got the newest idea. You’ve got the business plan. You’ve done all your research and you know that your startup will be successful because of the demand for what you’re offering. However, there’s one thing missing: financing. While you may opt for traditional financing, you may find yourself with inflexible payment options or requirements to give up some equity and control. Non-dilutive debt funding is a type of financing that is beneficial because it can also drive business growth. Here are some things you should know about non-dilutive debt financing.
What is Non-Dilutive Debt Funding?
Non-dilutive debt funding is an alternative financing source that is flexible in its repayment and doesn’t require owners to give away any ownership of the company. Essentially, instead of repaying a set amount on a set day, you’ll repay a percentage of your revenue. This may mean that your payments are higher or lower based on the stage your company is in through the life cycle process, but it gives you more flexibility to be sure you have the funds you need when you need them.
How Does Non-Dilutive Debt Funding Fuel Growth?
Non-dilutive debt funding fuels growth because it allows your startup flexibility. Investors are less worried about generating a large return and equity and are instead focused more on the longevity and sustainability of your business. Instead of worrying about how you’ll make that next loan payment, you can focus on growing your business in a manner that benefits all parties. Even better, you retain control of your company as you intended it, making it easier to continue growth while staying true to your business plan.
The Bottom Line
Obtaining financing is important for any startup but ensuring that you have flexibility in payment and business decisions is important for ensuring that your business is able to grow and expand.