Business Financing: How to get Started
Making the Decision to Fund Your Business
Deciding to fund your business is a major milestone - one that often takes weeks or even months of careful consideration. But once you’ve made that decision, the steps that follow are just as critical. The choices you make next can shape the future of your business in a meaningful way.
With so many financing products available today, each using its own industry jargon, it’s easy to feel overwhelmed. In this post, we’ll walk through common pitfalls business owners encounter when seeking funding, along with best practices to help guide you through the process with confidence.
Stick to What You Know: Use Common Sense
Many best practices in business financing are surprisingly similar to those you use in your personal life. Don’t let the unfamiliarity of business terms cloud the good judgment that’s brought you this far.
Think of it like buying a car. You’d likely start by identifying your must-haves, narrowing your search to a few models, then visiting dealerships to test drive, compare, and negotiate before making a choice. You should approach business financing the same way—by exploring your options, understanding the trade-offs, and making an informed decision.
Working with a Consultant
To help you navigate the complex landscape of financing, you might consider bringing in a consultant. When choosing one, be sure to assess their experience, network, and reputation. On your first call, ask questions like:
How many capital providers do you work with?
What types of financing do you specialize in?
What’s the average cost of capital on deals you close?
If their answers don’t align with your expectations, speak up. Use the opportunity to learn more about their background and how they might approach financing for a business like yours.
It’s also important to understand who the consultant is connected to. Many work with boutique capital providers—such as family offices or private equity firms - who may offer attractive terms but also have target returns they aim to hit. That means some offers might come with higher costs than you actually qualify for. However, these providers also want to diversify and expand, so competitive terms are still possible, it just requires attention to detail and thoughtful comparison.
More Options = Better Deals
Ask how many funding partners the consultant has access to. Just like you wouldn’t buy the first car a salesperson shows you, you shouldn’t accept the first financing offer you receive. The more providers a consultant works with, the more options you’ll be able to evaluate.
The best consultants work with lenders who compete against each other to win your business - ultimately driving better offers your way. Use that competition to your advantage.
Other Key Things to Watch For
When evaluating financing offers, be sure to review the fine print. Watch out for:
Early repayment penalties or pre-pay addendums
What qualifies as a default
The true APR (after all fees are included)
Any ancillary or hidden fees
Smart financing is about more than just getting money—it’s about making choices that position your business for long-term success. With the right approach and a clear understanding of your options, you can confidently take the next step in your business journey.
If you’re interested in hearing more or would like Excelerated Partners to guide you through your capital search, please make an inquiry!
