Michael Davis
November 6, 2025
Growth capital is one of those phrases that rarely means the same thing to different people. For some business owners, it’s a $10,000 boost to cover inventory. For others, it’s a $10 million investment to expand into new markets. No matter the size, the plain language definition of growth capital is that it’s money designed to help your business grow.
Who Is Growth Capital For?
Growth capital can be useful for nearly every type of business, but its application looks different depending on the model.
Brick-and-mortar operators often need upfront cash for buildouts, staffing, and inventory long before revenue starts flowing.
Venture-backed startups use it to accelerate product development, expand aggressively, and front-run competitors.
E-commerce companies typically put growth capital toward logistics and marketing so they can reach more customers quickly.
Service-based businesses may rely on growth capital to fund payroll or operations as customer demand grows unevenly.
No matter the type of business, operators need to be thoughtful about planning and cost management. Financial models are helpful, but they’re still just models, and they’re almost always a little wrong.
Types of Growth Capital
Growth capital generally comes in two forms: dilutive and non-dilutive.
Dilutive capital usually comes from investors in exchange for ownership in your business. It can provide significant funding and strategic support, but it also means giving up a share of your company and the decision-making power that comes with it. The advantage is that you don’t have the daily, weekly, or monthly payment obligations that come with most non-dilutive payment structures.
Non-dilutive capital includes loans, revenue-based financing, and other options that don’t require giving up equity. You retain ownership and control, but repayment begins immediately, typically on a monthly basis.
The right choice usually isn’t “either/or,” but a balancing act between the two, depending on how you choose to scale.
When Is the Right Time for Growth Capital?
It’s tempting to think about growth capital before you’re ready, and to some degree, that’s healthy. It means you’re thinking ahead. But securing funding can be a long process, and preparation makes all the difference.
You’ll generally know the time is right when:
You have a consistent, repeatable revenue base
Your product and ideal customer are clearly defined
You understand your unit economics (how much it costs to acquire and serve a customer)
You have a strong team foundation
You’re seeing compelling opportunities for expansion and understand the risks of each
You’re financially and emotionally ready to lead through growth
If you’re a brick-and-mortar operator, that also means you know what it costs to open, run, and staff a profitable location.
How We Think About Growth Capital at Homegrown
The biggest type of growth capital for small businesses is, surprisingly, credit cards. But there’s a better way.
At Homegrown, we provide up to $2 million in growth capital for multi-location brick-and-mortar entrepreneurs in exchange for just 1-6% of monthly sales. Our model is designed to be faster and friendlier than the banks, and far more friendly than “fast funding” providers.
Here’s what makes our model different:
No personal guarantees: your business is on the line, not your personal assets
Larger checks: enough to open 1–3 new locations, not just cover short-term expenses
Keep your equity: retain ownership and decision-making power
Early payment discounts: if business outperforms, you can payoff early and save
Our financing flexes with your revenue. Payments increase when business is strong and ease off when it’s not. That gives you built-in protection without balloon payments or rigid schedules.
Expansion is hard enough. Your funding options should not make it harder. If you’d like to learn more about how Homegrown can support your next stage of growth, apply for funding or subscribe to our newsletter for more insights.
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