Generally, the smaller the funding amount the more local financing sources tend to be. Today, this is not necessarily the case. Increasingly, capital providers of all sizes are looking for investment opportunities on a national scale. This lack of dependence on geography can create competition and open up better financing options than those found in a company’s own back yard.
Not too long ago it was against the rules to provide financial liquidity to owners that also needed money to fund growth. However, motivated by a strong desire to get money out the door after years of successful fund raising, many groups are now much more willing to provide owners capital for growth but also personal liquidity. (taking chips off the table) Equally important, this capital is available as both debt and equity investments.
Bankers do not like to compete, but competition can dramatically reduce the overall cost of capital. Traditionally banks tout the value of relationships, yet relationships rarely drive pricing or creativity as much as competition. Talking to multiple capital providers gives the company a back up plan.