If you’re a business owner or finance director that requires funding to drive ambitious plans for growth, it’s likely that your first instinct will be to contact your bank or run a time-consuming DIY process to save on advisor fees.

This is perfectly understandable. But if the answer you get is “No” – or if the terms don’t fit your plans – then always remember that this is not the end of the road. It’s the start of a better one that will widen your lens to the whole market and shape a structure that fuels, rather than constrains, that all-important growth.

Why “No” Is Not the Final Word

This is the time to make a key point. You should never approach the funding market without appointing a proper corporate finance advisor. The billion-pound UK funding market is far deeper and wider than most realise and you will need a knowledgeable partner if you are to navigate a successful course. Beyond the high street there are over 200 active funders across a range of categories including challenger banks, asset‑based lenders, debt funds and specialist products.

What this vast array of suitors affords you, however, is extraordinary choice -  a decline from one lender often has little bearing on what’s possible elsewhere because risk appetite, sector focus and underwriting philosophy vary widely.

Start With the Model, Not the Money

Before approaching funders, your advisor will work with you to build an integrated financial model that shows how capital will be used, how it drives revenue and cash, and how your business performs under stress. Funders draw confidence from models that clearly link profit and loss, balance sheet and cash flow, highlight covenant headroom, and pinpoint potential pressure points.

Admitting your pressure points – be they margins, wage inflation, working‑capital stretch or acquisition timing – also helps make your case more credible, ensuring that you choose between competing offers with your eyes fully open.

Assess the Whole Market. Properly

A genuine market‑wide process creates competitive tension between lenders that can lower pricing, improve repayment profiles and produce more flexible terms and conditions. Your advisor’s independence also matters, and it is vital that they are free from lucrative commissions or inducements from your target lenders. Done well, a structured process typically saves hundreds of management hours while unearthing an array of credible, bespoke options, rather than an unflexible “one size fits all” offer.

Choose the Structure That Matches Your Strategy

In terms of your deal then think in structures, not products. The final outcome might blend several of the following to match your growth plan and risk profile:

• Asset‑Based Lending (ABL): Monetises receivables, inventory and plant; often lowers all‑in cost and flexes with growth.

• Revolving credit facility (RCF): Smooths working‑capital volatility, often alongside a term facility.

• Cashflow term loan (first-lien): Supports acquisitions/event driven transactions or investment where the business is producing sustainable CFADs.

• Mezzanine debt (second lien): Adds patient capital with interest‑only or payment‑in‑kind elements to protect cash during heavy investment.

• Unitranche: Combines what would otherwise be separate first‑ and second‑lien facilities into a single secured loan with one interest rate – simplifying documentation and speeding execution.

• Venture debt / annual recurring revenue (ARR) structures: Useful for tech‑enabled models with recurring revenue and strong retention.

Don’t Leave Money – or Flexibility – On the Table

One key consideration is that two term sheets can look similar on price yet behave very differently in real life. Key levers – margins and fees, repayment profile (amortising v interest‑only phases), covenants, security, and the ability to roll up interest or carve out specific assets – can either protect cash and enable investment or choke growth. Getting these details right can materially shift outcomes; getting them wrong can turn a good plan into a tightrope walk.

Don’t Ignore the Small Print; Growth Lives (Or Dies) There

Headlines are only half the story. Documentation – covenants, baskets, permitted acquisitions, payment of yield, and payment‑in‑kind mechanics – can either enable your strategy or box it in. The right negotiation at term‑sheet and legal stages can protect capacity for investment, bolt‑ons and international expansion.

Summary

1) Appoint a trusted corporate finance advisor.

2) Define the business plan you want to deliver over three to five years and build a model that proves it’s workable and fundable.

3) Run a whole‑of‑market process to create options and competition.

4) Optimise the mix – cost, covenants, repayment and flexibility – so the facility works for the business, not vice versa.

5) Negotiate the detail so you’re not surprised by constraints later on.

Never forget that, if your bank can’t help, that’s not a verdict on your ambition – it’s a signal to widen the search and engineer a facility that genuinely powers growth.

‍

Dan Martin is a Partner - Business Funding at Shaw & Co.

‍

If you'd like to discuss how Shaw & Co can help you sell, buy or fund the growth of a business, please book a meeting here

‍