HOW TO SECURE DEBT FINANCING

For business owners who don't want to trade equity for funding, debt can be a smart (but sometimes expensive) alternative to venture capital.

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Inc. spoke with five debt experts—Tom Aronson, vice chairman and head of originations at Monroe Capital; Ben Brachot, co-founder and managing director at Dwight Funding; Kim Folsom, founder and CEO of Founders First Capital Partners; Jennifer Palmer, founder and CEO of JPalmer Collective; and David Spreng, founder and CEO of Runway Growth Capital—about best practices for business owners seeking to secure debt.

PICK YOUR DEBT TYPE

Runway Growth and Monroe Capital offer enterprise value lending, where the loan amount is directly proportional to a company’s valuation. This is a good option for brands that have valuable intangible assets, like IP, more than physical assets. JPalmer and Dwight Funding do revolving loans based on assets like receivables, inventory, or equipment. Other firms offer an increasingly popular model where debt is repaid as revenue comes in.

IDENTIFY AN IDEAL LENDER