Date posted: 6th Jul 2026
By Michael Dickens, Corporate Finance Manager at Clive Owen LLP
For owner-managed businesses, the question is rarely whether to grow, but how to fund that growth in a way that creates long-term value. Whether investing in new technology, acquiring a competitor or expanding into new markets, access to capital is often the catalyst that turns ambition into reality.
Yet many business owners instinctively assume that raising equity is the only viable route. Debt finance is often overlooked and, in many cases, can be the more appropriate solution.
Having spent over 15 years working in venture capital and corporate finance, I’ve been involved in over hundreds of transactions worth more than £100 million, ranging from seed-stage investments to multi-million-pound growth funding rounds, management buyouts and debt facilities.
Throughout my career, one observation has consistently stood out: the businesses that achieve the best outcomes are not those chasing capital, but those that understand which type of capital best supports their strategy.
Equity undoubtedly has an important role to play in that it provides funding without immediate repayment obligations, making it attractive for businesses pursuing transformational growth or significant investment in innovation. The right investor can also offer strategic expertise, industry knowledge and valuable commercial connections.
However, equity comes at a cost that is often underestimated. Unlike debt, the price is not measured through interest payments but through the future value of the business that owners relinquish when they sell a share of ownership in exchange for capital.
Once equity has been diluted, it is rarely recovered. External investors will expect influence over governance, strategic decisions and, ultimately, the timing and route of their exit. For many owner-managed businesses, maintaining control is just as valuable as securing capital.
Debt finance, meanwhile, offers an alternative for businesses with predictable cash flows and clear growth ambitions. Borrowing enables owners to access the funding they need while retaining ownership and benefiting from the future value they create. Although higher interest rates have increased borrowing costs in recent years, finance should always be assessed against the return it enables. If investment funded by debt generates sustainable profits and accelerates growth, the overall value created can far outweigh the cost of borrowing.
Today’s funding market is also far broader than many business owners realise. Alongside traditional bank lending, businesses can access asset-based lending, invoice finance, private credit, regional growth funds and other specialist lenders. Having worked across equity, debt, mezzanine finance and convertible loan structures, I’ve seen first-hand how funding solutions can be tailored to meet an organisation’s specific circumstances rather than forcing it into a one-size-fits-all approach.
One of the biggest misconceptions is that raising finance starts by approaching a lender or investor. A clear business strategy, robust financial forecasts and a management team that can articulate how funding will drive growth are fundamental. Whether assessing investment opportunities or advising businesses seeking finance, I have found that funders consistently back well-prepared businesses with credible plans and realistic assumptions.
Equally, funding should not be viewed as a binary choice between debt and equity. In many cases, the strongest capital structures combine both, using debt to fund investment while introducing a measured level of equity where appropriate to strengthen the balance sheet and support future growth.
Raising finance is about choosing the right type of funding to support long-term objectives while preserving value for shareholders. Business owners should consider not only how much money they need today, but also what they want their business to look like in five years’ time, who they want around the boardroom table and how much of the future success they are willing to share.
Successful fundraising isn’t about accessing capital at any cost, it’s about securing the right capital, on the right terms, to deliver sustainable long-term growth.
If you are considering your funding options or planning your next stage of growth, please contact Michael or a member of our specialist Corporate Finance team here.
