The Next Capital Cycle Will Reward the Prepared
I have been around finance long enough to know volatility rarely sends an invitation before it arrives. Wars. Market crashes. Global financial crises. Been there, done that.
The 1987 stock market crash in my rookie year at Rothschild in New York was my welcome to Wall Street initial shock. Since then, I’ve watched the Asian financial crisis, the dot-com implosion, September 11 and the 2008 financial crisis reshape markets and access to capital.
Different crises. Same lesson:
When the financial environment changes, access to capital changes with it.
As we look toward 2027, uncertainty is rising again. Geopolitical tensions, disrupted trade, higher energy costs and elevated borrowing costs are putting new pressure on businesses.
For small-business owners, those pressures don’t stay on a Bloomberg screen. They eventually arrive at the loading dock—in freight costs, inventory prices, supplier terms and the availability of capital.
That’s why asset-based financing deserves another look.
Your business may have capital hiding in plain sight—in equipment, commercial real estate, purchase orders, government contracts or other financeable assets.
In this article, I’ll examine several ways to unlock that capital—and when each may or may not make sense.
Because the better question heading into 2027 may not be:
“How much will a bank lend me?”
It may be:
“How much capital is already hiding inside my business?”
I. Stop Thinking About Capital as Just a Loan
For decades, small-business financing has largely begun with the same questions: What were your revenues? What did you earn? What does your credit look like? How much debt are you already carrying?
Those questions still matter. But they don't always capture the full economic value of a business.
An asset-based perspective starts somewhere else.
What does the business own? What has it sold? What has it contracted to deliver? And where is capital already trapped?
It may be sitting in accounts receivable waiting 30, 60 or 90 days to be collected. It may be embedded in inventory, machinery or commercial real estate. Or it may exist in a different form entirely: a large purchase order or government contract that the company has won but lacks sufficient working capital to fulfill.
This isn't fringe finance. The SBA's Working Capital Pilot now explicitly supports both asset-based lending against accounts receivable and inventory and transaction-based financing designed to help qualifying small businesses fund contracts and projects.
The strategic shift is subtle but important.
Instead of asking only:
"How much can my business borrow?"
Start asking:
"What inside my business can support the capital required for its next stage of growth?"
That is where the 2027 capital conversation gets interesting.
II. The Order Is There. The Cash Isn't.
How Purchase Order Financing Turns Sales Into Executable Growth
One of the most frustrating financing problems in business begins with good news.
You won the order.
Imagine a growing distributor receives a $1 million purchase order from a major retailer. The customer is creditworthy. The margins are attractive. But the manufacturer requires payment before production, freight must be arranged, and the retailer won't pay until the goods are delivered.
Suddenly, growth creates its own liquidity crisis.
This is where purchase order financing can become a strategic tool.
Rather than underwriting the company solely on historical earnings and its balance sheet, PO financing can look closely at the economics of the transaction: Is there a firm purchase order from a creditworthy customer? Can the supplier perform? Can the borrower successfully execute the order? And is there a clearly identifiable path to repayment?
If those pieces align, financing can be structured to fund suppliers or manufacturers so the inventory can be produced, acquired and delivered. After completion, repayment may come through the customer's payment or through an accounts-receivable factor, asset-based lender, bank or other established takeout structure.
The implications can be significant.
A company doesn't necessarily have to surrender equity simply because sales are growing faster than working capital. Nor does it always have to tell a major customer, "We can't handle an order that large."
I've seen this dynamic repeatedly in finance:
Growth consumes capital before it produces cash.
In 2027, with supply chains vulnerable and the cost of capital elevated, knowing how to finance that gap could determine which businesses merely win opportunities-and which ones can actually execute them.
III. Winning the Government Contract Is Only Half the Battle
Government contracts can transform a small business. They can also create an immediate financing problem.
A contractor wins a substantial federal, state or municipal award. Now it must mobilize workers, purchase materials, secure equipment, pay suppliers or manufacture goods-often well before the government makes its first payment.
The contract has value. But value and liquidity are not the same thing.
Government contract financing can bridge that gap by providing capital tied to the economics and performance requirements of an awarded contract.
The opportunity extends well beyond traditional defense contractors. Government agencies purchase everything from construction services and technology to vehicles, medical supplies, generators, food, uniforms and industrial equipment. Specialized financing can support mobilization, supplier payments, inventory acquisition and manufacturing necessary to perform the contract.
The underwriting is therefore about more than yesterday's financial statements. Experienced government-contract finance sources examine the validity of the award, the government obligor, performance requirements, supplier capabilities, margins and-critically-the path to repayment. King Trade Capital, one of Ravenbanq's financing sources, has specialized in government-contract financing since 1993, including domestic and international transactions.
For business owners, the lesson is straightforward:
Don't wait until after winning a major contract to determine how you're going to finance it.
Capital planning should begin while you're pursuing the opportunity-not when performance is already due.
IV. Your Equipment May Be Doing Only Half Its Job
How Equipment-Secured Financing Can Turn Existing Assets Into Working Capital
For many established businesses, some of their most valuable assets are hiding in plain sight.
A manufacturer may own CNC machines. A contractor may have excavators, loaders and cranes. A transportation company may control a fleet of vehicles. An agricultural business may have substantial capital invested in tractors and specialized machinery.
The equipment is producing revenue. But the equity accumulated in that equipment may also represent untapped borrowing capacity.
An equipment-secured term loan can allow a qualifying business to borrow against eligible machinery or equipment while continuing to use those assets in normal operations. The proceeds can potentially provide working capital for expansion, inventory, additional equipment, refinancing or other business needs.
A sale-leaseback approaches the same opportunity differently. The business sells eligible equipment to a financing source, receives capital from the transaction, and leases the equipment back-allowing operations to continue while converting previously illiquid asset value into liquidity.
Why does this matter heading into 2027?
Because replacing productive assets can be expensive, conventional credit may remain constrained, and businesses facing volatile input costs may need liquidity without surrendering ownership of the company.
After years in asset-based finance, I've learned to look at equipment differently.
A machine doesn't necessarily have to perform only one financial job.
It can manufacture the product, move the freight or build the project-and, when appropriately structured, the equity inside it can potentially help finance the company's next stage of growth.
Sometimes raising capital doesn't begin with acquiring something new.
It begins by recognizing the financial capacity of what you already own.
V. The Equity Hiding in Your Real Estate
Why Refinancing Your First Mortgage Isn't Always the Answer
One of the first places I look when evaluating a company's capital options isn't always the business itself.
It's the real estate.
An entrepreneur may own a warehouse, office, retail property, investment property-or even a residence-with substantial accumulated equity. Yet when the business needs working capital, the owner may immediately reach for an unsecured loan, expensive short-term financing or a merchant cash advance.
There may be another option.
Real estate-secured financing can convert underutilized property equity into business capital without necessarily disturbing an existing first mortgage.
That last point matters. Many owners still carry first mortgages originated when rates were considerably lower. Replacing favorable debt with today's higher-cost financing simply to access equity may be economically inefficient.
A second-lien structure can potentially preserve that first mortgage while unlocking additional liquidity.
Depending on the property, equity and borrower profile, Ravenbanq has access to structures ranging from $100,000 to $3 million, including first, second and third liens, cash-out financing and bridge loans, with combined loan-to-value potentially reaching 70%.
The proceeds can address working capital, equipment purchases, expansion, bridge financing or the refinancing of expensive short-term business debt.
I've seen entrepreneurs become so focused on the income statement that they overlook one of the strongest assets on their personal or business balance sheet.
Your real estate doesn't have to be sold to become part of your capital strategy.
Sometimes the smarter question isn't what the property is worth.
It's what the equity inside it could allow your business to do next.
VI. When Traditional Mortgage Underwriting Doesn't Fit the Entrepreneur
Why Non-QM Financing Can Better Reflect How Business Owners Actually Earn
Entrepreneurs rarely have simple financial lives.
A business owner may generate substantial cash flow while minimizing taxable income through legitimate deductions. A real estate investor may own a profitable portfolio but not receive a conventional W-2 paycheck. Another entrepreneur may have significant assets and liquidity while presenting an income profile that doesn't fit neatly inside traditional mortgage underwriting.
That doesn't necessarily make the borrower weak. It can make the conventional underwriting model incomplete.
This is where Non-Qualified Mortgage (Non-QM) financing can provide another option.
Unlike the asset-based business financing we've discussed, Non-QM is real-estate financing. But the underlying philosophy is similar: understand the economic reality of the borrower instead of evaluating every borrower through the same lens.
Through Ravenbanq's Non-QM lending relationships, qualifying borrowers may have access to structures including bank-statement programs, DSCR investment-property loans, asset-utilization programs, second liens and other alternative-documentation solutions. NewPoint Mortgage Non-QM Programs
For an investor, for example, a DSCR loan can place greater emphasis on an investment property's rental economics than on conventional personal-income documentation. For a self-employed entrepreneur, bank statements may provide a different way to demonstrate cash flow.
This matters because business owners shouldn't automatically assume that a conventional mortgage rejection means the underlying real-estate opportunity doesn't work.
Sometimes the problem isn't the asset.
Sometimes it isn't the borrower.
Sometimes it's simply the wrong underwriting box.
And after nearly four decades in finance, that's one lesson I keep coming back to: capital becomes more accessible when the financing structure reflects the economic reality underneath it.
VII. The 2027 Capital Audit: What Are You Not Using?
Before You Look for More Capital, Look More Closely at Your Business
After nearly four decades around financial markets and lending, one pattern has become clear to me: businesses often begin looking for capital by searching for a loan instead of first identifying what they already have that can support one.
Heading into 2027, I would encourage every business owner to conduct what I call a capital audit.
Look beyond cash in the bank.
Do you have accounts receivable from creditworthy customers? Inventory that continually converts into sales? Machinery or equipment with meaningful equity? Commercial real estate that has appreciated or been substantially paid down? A large purchase order waiting to be fulfilled? A government contract requiring mobilization capital?
Each tells a different financing story.
Even the SBA has increasingly embraced this distinction. Its Working Capital Pilot supports both asset-based lines against receivables and inventory and transaction-based financing for specific projects and orders-recognizing that growing businesses don't all require the same form of capital.
The objective isn't to borrow against everything you own.
It's to understand your options before circumstances force you to need them.
Volatility has taught me that the worst time to discover your sources of liquidity is during a liquidity crisis.
Know your assets. Know your borrowing capacity. Know which financing structures fit which opportunities.
Because in uncertain markets, access to capital isn't merely a financing issue. It can become a competitive advantage.
Final Thoughts
The financial landscape entering 2027 is unlikely to reward complacency.
Geopolitical instability, elevated borrowing costs, energy volatility and persistent supply-chain vulnerabilities can change operating conditions quickly. But after nearly four decades in finance, I have learned that uncertainty itself is rarely what determines which businesses endure.
Preparation does.
The strongest companies don't wait for capital to become urgent before understanding where it can come from. They know the value embedded in their receivables, equipment and real estate. They understand how a purchase order or government contract can potentially support financing. And they recognize when an alternative structure may better reflect the economics of their business than conventional credit.
That is the larger lesson of asset-based finance.
It isn't about borrowing against everything you own. It's about understanding the financial capacity of what you already have.
At Ravenbanq, that is how we approach capital: start with the business, the assets and the opportunity-then determine which financing structure, if any, makes economic sense.
I have lived through enough market cycles to know that nobody consistently predicts the next disruption.
But you can prepare for it.
Know what you own. Know what it can support. And build your capital options before you need them.
Because when volatility arrives, optionality is capital.