Previously, we've always implicitly assumed that both forms of financing, debt and equity are available to businesses. But is this actually the case? And the simple answer is no, it isn't. And as so often there are many reasons as to why access to one or both forms of financing may be limited.

To develop an initial understanding as to why this is the case, let's have a look at the corporate lifecycle.

Imagine you have a light bulb moment, a product idea that you just know is going to revolutionize the market. So you dive in head firstt, dedicating your weekends to developing a prototype. Your passion fuels your progress, and before you know it, you are ready to take the leap. You leave your day job and focus on your vision full time. This is the startup phase. You are all in investing, not just your time, but your savings too, turning them into an asset for your fledgling business. You own every part of it, every decision, every risk. You are the sole equity holder. But as your savings start to dwindle and the prototype shows promise but isn't quite finished, you hit a snag. You need more money to get the product to market, but a bank loan isn't an option just yet. Banks want security. A proven track record, which you don't have your only option. More equity, maybe friends, family or angel investors who believe in your vision as much as you do. Fast forward and your prototype becomes a hit. Welcome to the growth stage. Sales are climbing, the market's buzzing, and your business is expanding. Now you are not just a one person show. You've got a team office space, maybe even a supplier who might even be overseas. This is when the debt starts to complement equity. Banks are now more willing to talk because you've got numbers to show. Revenue is coming in and there's a history of performance that they can bank on. Then comes the maturity stage. Your business is established, the growth is steady, and you are a known name in the industry. Here you might go public offering shares to the world, and debt finance is now a regular part of your financial strategy. You have a solid credit history, and financial institutions are more than willing to extend credit for new projects or new expansion, but every story has its twists and so does the corporate lifecycle. You may hit the decline stage, maybe the market's changed or competitions become fierce. Sales may dip, and that once steady growth is now a challenge. In this stage, careful financial management is critical. You need to find a balance between debt and equity, making strategic decisions to either reinvent your business or prepare for a graceful exit. In some cases, A business may face demise. The product or service is no longer viable and the company is dissolved or even sold. It's tough, but it's also the reality of the business world. Yet not all declines lead to an end. Sometimes there's a rebirth. Maybe it's through a restructuring, a new product line or a complete pivot in business model. Here, financing may be a mix of equity, perhaps from venture capitalists looking for a phoenix to rise from the ashes or from debt, from lenders who see the potential for a turnaround.

And through it all, from that initial spark to each pivot and growth spurt, the availability and mix of financing from equity to debt evolves. It's all about risk and return, about proving your business is worth at every stage, and about understanding how each phase of the lifecycle opens up new doors of opportunity.