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There’s a common misconception when it comes to capital and that’s the idea that capital is money. While all businesses need money to survive, what is really needed is capital, and that can come in many forms. There are 3 types of capital we use at Octavian to get the results you need.
Creating a debt based on credit, whether it’s fixed like in a loan, or revolving like credit cards is the most common form of capital. But is it the best for your needs? Not always. It’s also the hardest to get approval for because it carries the highest risk and should be used as strategically as possible.
Practical Use - Using debt to grow or strengthen your business credit is a good thing and should be done when hardship isn’t an issue so that it is available when needed. Most owners wait too long and then aren’t able to secure funding when they need it.
This form of capital trades the desired outcome for a % share of ownership in the business. This means the risk is shared with both the current owner and the lender because they both have equal stake. The lending partner may or may not be the one managing or running the business.
Practical Use - When an owner needs to step away from running the business due to health or other personal matters, or if the business is in danger of becoming insolvent, investors may take a % of the company in trade for managing the business or pulling it out of the trenches. This type of capital works best if you have no business credit and need help immediately.
This is the most overlooked but very powerful form of capital. If you have great human capital, you avoid many of the problems with poor management that others face. Human capital is when you’re using the experiences, skills, wisdom or knowledge of others to cover areas where you lack. Your management team should always be your most secure and best form of capital.
Practical Use - We make sure you have the most capable, versatile and resilient management team available and don’t hesitate to replace employees who slack or are wasteful.
Contact us today and let's create a plan to get you the capital you need.
What You May Need Capital For...