DEBT FINANCING

Debt Financing

Debt financing, like all start-up funding, can take many different forms and structures depending upon the business and the financing source. Debt sources exist for both initial financing, follow-on financing, and operating financing for businesses. Entrepreneurs should explore a variety of funding sources and types to find capital that best suits their needs.

• Local Banks and Financial Institutions: Entrepreneurs tend to start their exploration with local financial institutions, typically with banks with which they have had previous or personal experience.  If entrepreneurs cannot get their capital needs addressed by a local lender, they may explore national start-up funding sources such as Silicon Valley Bank or Comerica's Technology & Life Sciences Division.

• Credit, Inventory, and Equipment Financing: A range of finance companies exist to provide start-up funding for companies that are not yet "bankable" by traditional lending sources. These finance companies will provide capital collateralized by receivables, inventory, and equipment, tangible assets. In addition, equipment companies will likely have finance packages available for start-up companies.

• Mezzanine Financing: Finally, many sources and types of mezzanine financing exist. The term is typically used to refer to later-stage capital, usually the final round of financing prior to an exit through acquisition or a public offering.

There are many other forms of debt and venture debt financing available to  entrepreneurs especially for revenue-stage. Please contact us to learn more.

Credit to this article goes to bioenterprise.com