Mike Jaquith knows running a business is complex. As a banking Relationship Manager for many of the DMV’s small businesses, he talks to dozens of small business leaders each week. “Business owners juggle many priorities: from hiring the right talent, to managing product/service offerings, to steering an organization’s strategy. Having the cash flow to operate their business on their terms ties into all the priorities,” he notes.
The most recent Fed Small Business Credit survey reveals over half of small businesses are challenged by uneven cash flow, while even more cite operating expenses as a challenge. At the same time, businesses are being squeezed – with 75% of firms challenged by rising costs of goods, services and wages. 1
As VP, Business Banking Relationship Manager at EagleBank, Mike’s day-to-day is helping business owners access financial tools that can help them thrive: “When businesses need capital sources, we have transparent and knowledgeable conversations with them on financing options like loans, lines of credit, as well as treasury management tools.” He says that by building a full relationship with a banking partner, businesses can discuss funding and loan needs proactively before they are urgent, learn about premier deposit rates, access potential discounts on treasury services, and more expeditiously work through day-to-day needs. He adds, “I like to think of it as getting the maximum partnership value to accompany your hard work.”
Of course, bank financing is just one of many capital sources in the market, and all sources offer different benefits. From investors to grants, donations to loans…businesses looking for capital have many options. What Jaquith wants clients to know, however, is that how businesses source and structure capital infusions may change long-term qualifications for bank credits and traditional financing.
>> “When making capital decisions, there is often more than one direct impact,” Mike notes.
Consider ownership structure
“Knowing your numbers is key,” Mike notes. For example: Bringing on investors, such as angel investors or private equity, can be an attractive option for business owners in many ways. Yet, it may come with tradeoffs of stock or ownership stake, which he finds can sometimes surprise businesses in terms of downstream impacts. “If you’re a fan of ABC’s Shark Tank, you’ll notice that the sharks are always trying to get to 20% ownership,” states Mike. “That number is a key threshold, as bank loans typically require guarantees from anyone with over a 20% stake. SBA (Small Business Administration) loans are often even stricter: they can require guarantees from anyone with 1% or more ownership in practice.” His advice? Business owners who choose to allocate equity to investors should be knowledgeable about the impacts and consider how important future ease of access to bank loans may be to their business’s future.
Below are some other common categories of funding:
| Source | Considerations |
| Private Equity or Angel Investors | Positives: Can be a good source of needed capital, investors can offer key advisory governance and networking access Consider: Giving up ownership stake/stock sacrifice can have potential impacts to traditional financing eligibility |
| Hard Money Lenders | Positives: May be able to provide cash quickly, with fewer requirements than traditional bank financing. Consider: Rates can be a multiple of traditional bank rates. High-interest debt without cash flow creates a risk if unable to pay the loan back quickly. |
| Grants or Fundraising | Positives: Grants or fundraising can be an excellent option to provide funding for nonprofits, institutions, educational organizations and more. Consider: Grants can be competitive, and funds can be limited to certain uses depending on the terms. Fundraising can be labor-intensive for businesses to operate and sustain. |
| Tenant Improvements | Positives: TI, or landlord-funded buildout costs, can offer powerful upgrades for retail, medical, restaurant or office-based buildings. Consider: This funding type doesn’t create more liquidity for businesses who need cash for other types of projects. |
| SBA Loans | Positives: Competitive capital and a longer repayment term can be a great option for making capital available to small businesses and startups. Consider: The SBA loan process can require a lot of documentation, and equity injections on behalf of the business. Banker’s tip: When working with a relationship-focused bank, you can often get creative with your capital stack equity injection, reducing the amount of equity that comes out of your working capital – and reduce the complexity of the process. |
| Conventional Bank Loans | Positives: These loans offer flexibility to modify credits over time including increasing capital access and they can have the best rates while maintaining full business ownership/control. Consider: Owner FICO credit scores are a main factor in determining eligibility. Also, cash flow analysis is a typical component during the application process, and accounting strategies often influence cash flow calculations. |
Build your team
No matter where you are in the process, Mike recommends that small businesses build a trusted financial team, which may include business leadership, accountants, attorneys and their banker. These are the people with whom you can discuss and describe options before making decisions. “Clients likely already have all the parties in place, but don’t always think of connecting them,” he notes. “A financial strategy call with a client’s banker and accountant can make a huge difference in helping the business maintain eligibility for new capital extensions while minimizing tax liability.”
Clients are often surprised to find how many tools community bankers may have to work with them. Operating in this transparent, connect-the-dots way may also help business owners find options they hadn’t considered: whether it’s unlocking competitive rates and discounts, or coming up with creative solutions like extended repayment terms to reduce monthly payments when businesses need more liquidity, or bridge loans to help in a key time of tight cash flow.
Think ahead
It’s natural to think about capital needs during a time of sales uncertainty or market pressures, notes Mike. But advance planning can be even more important – and securing a loan during times of growth or good cash flow can be just as transformative. Recently, bankers on Mike’s team reached out to a longtime client to offer an extended line of credit before they asked—just in time for them to break ground on a new grocery store location. “They must have been reading my mind,” the client noted.
No matter how your business evaluates its operating needs, the structure you use to acquire needed capital can matter just as much as what capital is available. With transparency, teamwork, and foresight, you can have the power to find financing on your terms.
- Federal Reserve Banks. (2025, March 27). 2025 report on employer firms: Findings from the 2024 small business credit survey. https://www.fedsmallbusiness.org/survey/2025/report-on-employer-firms
EagleBank is Member FDIC and an Equal Housing Lender.
