When it comes to raising capital, you either pay in the short term or you pay in the long term.
Most business owners don’t raise funding often enough to build real expertise in it. It’s not something you do every month. For many SMEs, it’s something you might do once every few years, at a critical point in their growth journey. That lack of frequency matters, because it means most founders are learning on the job, often with significant amounts of money at stake.
There’s a strong parallel here with selling equity. If you’ve never sold a business or brought in investors before, you’re unlikely to fully understand valuation dynamics, deal structures or how to negotiate terms that protect you over time. Selling to the first interested party might feel like progress, but it can be one of the most expensive mistakes you make.
The same applies to debt funding. Many entrepreneurs take pride in orchestrating their own deals. They engage directly with banks, put together their own documentation and negotiate terms themselves. On the surface, this feels efficient. You save on advisory fees and maintain control of the process.
But that saving is often an illusion.
When you sell a house, you trust an estate agent. You understand that their expertise, network and negotiation skills will ultimately deliver a better outcome. Yet when it comes to raising capital, something far more complex and potentially far more costly, many business owners choose to go it alone.
The reality is that fundraising is a specialised discipline. It requires an understanding of lender appetite, how different institutions assess risk, how to position your business, and how to structure a deal that aligns with your cashflow and long-term strategy. It also requires the ability to identify and avoid punitive clauses that may not be obvious at first glance.
This is where the concept of cost needs to be reframed.
Yes, professional fundraising support comes with fees. Retainers start from R30 000 to R40 000 per month over a three to six month period, depending on the size and complexity of the raise. On top of that, there may be success fees linked to a successful outcome. As the size of the funding requirement increases, so too do these costs.
For many SMEs, that feels like a significant upfront investment.
But compare that to the long-term cost of getting the deal wrong.
A single percentage point difference in interest rates over the life of a loan can translate into a substantial financial impact. Over several years, that additional cost compounds quickly. Add to that restrictive terms, inflexible repayment structures or clauses that penalise missed covenants, and the true cost becomes even more pronounced.
It’s not uncommon for business owners to underestimate this impact. Until you run the numbers properly, the difference between a well-structured deal and a poorly structured one can be easy to overlook. When you do the maths, it can be a sobering exercise.
That’s why the question shouldn’t be whether you can afford professional support. It should be what the return on that investment looks like.
If a professional adviser can secure better pricing, align the funding structure to your business model and protect you from long-term downside, the value created often far outweighs the upfront cost. In many cases, the savings over the life of the facility can be multiples of the advisory fees.
There is also an opportunity cost to consider. When founders and CEOs are deeply involved in fundraising, it diverts attention away from running and growing the business. Capital raising is time-intensive, and without the right experience, it can become a prolonged and frustrating process.
Bringing in the right expertise allows you to focus on what you do best, while ensuring the funding process is handled with the necessary rigour.
Ultimately, it comes down to a simple question: what is this growth worth to you?
What is the value of securing the right funding, on the right terms, at the right price? And what would a better deal save you over time?
Before entering your next funding discussion, take the time to model the numbers. Look at the impact of even small changes in interest rates and terms. Understand what you could be saving, not just today, but over the full lifecycle of the facility.
Because in finance, everything comes down to the numbers. And if you speak to the right people, those numbers will tell you exactly what to do.
Authored by our CEO, Rowan de Klerk who shares insights tailored for CFOs and business leaders. Subscribe here to receive future editions.