Growth Capital explained

Growth capital is suitable for companies that are looking to expand operations, enter new markets or finance an acquisition.

Have the facts before you apply
Growth capital is also called expansion capital or growth equity. It is a type of private equity investment, in companies that are looking for capital to expand or restructure operations, enter new markets or finance a significant acquisition.

Businesses that seek growth capital will often do so to finance a key event in their business lifecycle. These companies are likely to be able to generate revenue and profit but unable to generate sufficient cash to fund major expansions, acquisitions or other investments.

Access to growth equity can be key to pursue growth including for example facility expansion, sales and marketing initiatives, equipment purchases, and product development.
Advantages of growth capital

Advantages include:

  • Access to business expertise. Aside from the financial backing, obtaining growth financing can provide a business with a valuable source of guidance and consultation
  • Access to additional resources such as legal, tax and human resources
  • Tapping into your financier’s connections could have tremendous benefits
Disadvantages of growth capital
Disadvantages include:
  • Loss of control of your business as the size of the stake could determine how much say your investors have in shaping your company’s future direction
  • Minority ownership status depending on the size of the investors’ stake in your company. which means you could be giving up majority control of your own business
  • Funding
    From £10,000 to £5 million or more
    From 2 years to 5 years or more
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