When businesses need funding, whether they looking to launch, develop new products or services, or achieve growth. Yet not all business financing is created equal, and entrepreneurs need to understand the difference between traditional debt-based loans and private equity financing before they make a decision.
Traditional Debt-Based Loans
Most businesses are familiar with the process of approaching banks and similar institutions for funding. Traditional loans require high credit ratings and collateral to get funding. However, traditional lending channels have been raising their credit and collateral requirements, while simultaneously lowering their lending limits for businesses. The truth is that most businesses need funding that offers more robust – or ongoing – funding with more flexibility and guidance from a team with the depth of knowledge and track record to help businesses reach their critical milestones.
Private Equity Financing
Private equity is the go-to option for businesses that do not want to take on debt, but also need financing that goes beyond the lending limits of banks and other traditional institutions. Unlike traditional loans, private equity financing provides capital in exchange for returns on the investment – be it stock options, a percentage of revenue, or a small share of ownership in the business. Additionally, private equity firms are invested in seeing their clients succeed. This means they will offer guidance and advice to keep things on track and make sure businesses reach their goals. Contrast this with banks that do not understand the private sector, have no vested interest, and only care about their bottom lines.
Getting Private Equity Financing for Your Business
The best way to get private equity is by talking with a finance firm with experience, knowledge, and a successful track record. Seek out professionals who understand your business, so they can structure an agreement to help you reach your goals and ensure success for the long run. GM Capital Group specializes in private equity solutions that can be scaled to the size and scope of your goals. To learn more about private equity financing, reach out to the team at GM Capital Group today.