Assessing capital needs
New funding options can help family businesses grow
You’ve crafted a vision for your family enterprise. New funding options for business growth can help you transform that vision into a masterpiece. With the proper planning around family business funding, you can be ready to seize an opportunity when it presents itself. In this installment of our eight-part series, “Pivotal moments for family enterprises,” we’ll take a close look at new capital funding options and what they could mean, from a bigger picture standpoint, for the future of family enterprises.
Pivotal moments for family enterprises under the spotlight
Family dynamics can have a big influence on what requires additional capital, when it’s needed, and how it’s accessed and deployed. As we discussed in the kickoff to this series, establishing a formalized governance structure prompts the business to align on the ‘what,’ ‘when’ and ‘how’ in advance. Not only can this prepare the business to seize new opportunities with confidence and agility, but it helps ensure the needs of the business are balanced with those of family members.
“Being prepared for the capital needs of your business almost always leads to increased strategic flexibility,” says John Deering, Leader, Deloitte Capital Advisory. “It’s a good way to know an optimal solution can be available when you need it.”
In the past, family enterprises had few options for accessing capital. As a result, they largely relied on traditional commercial banks. Unfortunately, commercial banks often took a conservative stance and restricted how funds could be used, thereby limiting what a family enterprise could achieve. While the debt markets have since evolved to include new, non-traditional lenders, many family enterprises are not aware of these options.
From the importance of a capital needs assessment to knowing where to start—there are key questions leaders should consider during normal governance deliberations, due diligence and capital needs assessments.
