Financial growth

Financing business growth

Rapid growth can stretch your resources to the limit. So how do you finance your growth, without growing yourself out of business?

When your business is growing rapidly, you’re constantly paying out money to buy more stock and supplies, hire new staff, open new premises or buy new equipment.

Even with profitable sales, that investment can take time to pay off. The result can be a cash flow crisis that could end your growth story before it’s begun.

The trick is to give your business the money it needs to grow, without starving it of current cash flow. The financing options are similar to those when starting your business, so to help choose the right one, try a business review.

Debt finance

Equity finance

What is it?

  • You borrow money from a bank (or someone else)
  • An investor buys a stake in your business


  • Interest payments are generally tax deductible
  • You retain complete ownership of your business and its profits

  • The investor shares your risk so if your business fails, there’s no need to pay them back
  • No interest payments but you may need to pay an investor a share of profit


  • You pay interest on your borrowings
  • You must repay the amount you borrowed
  • In most cases, you will need to offer security for your loan, so this option is difficult if you don’t have assets

  • You share ownership of your business so if it’s successful, you share that success
  • You lose control of your business. E.g. your investor may take part in decision marking
  • Your investor may share profits

The trick is to use the right option for the right purpose — short-term cash flow borrowings for day-to-day working capital, and longer term options for buying assets.

When you need to


Grow your business

Improve cash flow or get extra cash

Buying vehicles and assets

Depending on the kind of investor you choose and agreement you reach, they could be taking a very active role in the future of your business. It’s important to find someone whose outlook and aspirations match yours and whose skills will complement yours.

Family and friends

  • While loved ones may be more generous than outsiders, this option is not for the faint-hearted
  • You have to disclose business details to those them
  • If something goes wrong and they lose their investment, it could damage the relationship
  • Not a good option if you want to raise large amounts

Business partner

  • You need to be confident that you can work harmoniously together in the long term
  • Essential to have a written partnership agreement setting out how disputes will be settled and what happens if one partner leaves the business

Business angel

  • Wealthy individuals looking for fast-growing businesses to invest in
  • Often experienced business people who can be invaluable as mentors and advisers
  • Typically invest up to $2million
  • Be after businesses with exceptional growth prospects, so you’ll need to demonstrate potential

Venture capital

  • Professional investors who invest in promising businesses and help them grow, often to the point where they’re ready to be listed on the sharemarket
  • Make money by selling their share in your business
  • Typically exit your business in three to five years with a return of 35 per cent p.a. or more
  • Invest between $2million and $10million depending on your business

Private equity

  • Investors with emphasis on larger businesses
  • Often involved in management buyouts using borrowed funds
  • Aim to realise a large return in a short time frame, allowing them to cover their cost of funds and compensating them for their risk
  • Give access to $2million to $10million-plus

Launching a new initiative, growing your business or just need to keep up with changes?  Find the right lending solution for your business needs with our easy 3-step selector tool.

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Important information:

As this advice has been prepared without considering your objectives, financial situation or needs, you should, before acting on the advice, consider its appropriateness to your circumstances. All products mentioned on this web page are issued by the Commonwealth Bank of Australia; view our Financial Services Guide (PDF 59kb).