Most businesses start their first real financing conversation at the exact moment they need the money — which means every part of the process, from application to underwriting to funding, is happening under time pressure. There’s a different approach, used by more experienced business owners: building a relationship with a funding partner well before an urgent need arises, so that when capital is actually needed, the process starts from a position of familiarity rather than a cold start.
Why timing changes the entire dynamic
A financing conversation that begins under real time pressure limits your options in ways that aren’t always obvious in the moment. Underwriting takes time regardless of urgency, so a rushed timeline often means fewer offers to compare, less room to negotiate terms, and more pressure to accept whatever’s available rather than what’s actually best for your business. A relationship built in advance removes that time pressure from the equation entirely.
What an early relationship actually looks like
This doesn’t require applying for financing you don’t yet need. It can be as simple as having an initial conversation with a funding specialist about your business, your industry, and your general growth plans — establishing a baseline understanding before there’s a specific, urgent request attached to it. Some businesses also choose to set up a modest facility, like a line of credit, well before they expect to need to draw on it meaningfully, precisely so it’s already in place when a real need arises.
Why this matters more for asset-based and working capital structures
For financing structures that reassess periodically as your business changes — asset-based lending, working capital lines of credit — an established relationship means a lender already has historical context on your business, which can make each subsequent review faster and more informed than a first-time application would be. The second and third conversations with an established lending partner are typically smoother than the first, precisely because the groundwork has already been laid.
Why this matters for venture-backed companies specifically
For companies planning an eventual venture debt raise, having relationships with potential lenders well before the actual funding need arises gives those lenders time to understand the company’s trajectory and metrics gradually, rather than evaluating everything at once under the time pressure of a specific runway deadline. Founders who start these conversations early, even informally, often find the eventual formal process moves faster and more favorably than those starting from a cold introduction.
What to actually do if you don’t need capital right now
Have an initial conversation anyway. Understanding what a lender would need to see from your business, and what financing structures might eventually fit, costs little in the moment and provides real value later.
Keep your financial documentation reasonably current. A business that can produce clean, recent financials quickly is in a stronger position than one that needs weeks to assemble basic documentation, regardless of how far in advance the relationship was established.
Revisit the relationship periodically, particularly after a significant change in your business — new products, new markets, a meaningfully different revenue trajectory — so the lender’s understanding of your business stays current rather than static.
The cost of not doing this
The businesses most likely to accept an unfavorable offer, or to run out of time before securing financing at all, are often the ones starting the conversation for the first time at the moment of urgent need. This isn’t a guarantee that early relationships prevent every financing challenge, but it removes one significant, avoidable source of risk: starting from zero exactly when time pressure is highest.
A reasonable way to start, even today
If you don’t currently have any relationship with a funding partner, the lowest-effort starting point is a single introductory conversation — not an application, not a commitment, just an initial discussion about your business and what financing options might eventually make sense. That conversation costs little now and can meaningfully change your position later, whether “later” is next month or two years from now.
FAQ
Does having an early conversation with a lender commit me to anything? No — an introductory conversation is generally just that, and doesn’t obligate you to apply for or accept any specific financing.
Should I set up a credit facility even if I don’t currently need to draw on it? For some businesses, particularly those with growth plans or seasonal cycles, this is a reasonable strategy — worth discussing directly with a funding specialist to see whether it fits your specific situation.
How often should I revisit an established lending relationship? There’s no fixed schedule, but a meaningful change in your business — new products, markets, or a significant shift in revenue — is a natural, sensible trigger to reconnect and update the relationship.
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Yardline’s specialists are available to talk through your business and financing options — no application or commitment required to start the conversation.
