When growing companies seek external support as they raise debt, it’s not uncommon for other players in the growth-stage ecosystem to assume the worst. Is the business in distress? Are they running out of capital?
In reality, it’s just a misconception. If a company hires an advisor to help secure debt financing, it doesn’t actually mean that something’s wrong. In fact, the data tells an entirely different story.
At 5th Line, we believe the right advisors can be valuable partners who support the long-term success of growth-stage companies. That means it’s time to reframe how we think about debt and capital advisory. Engaging with external support shouldn’t immediately raise any red flags.
Let’s take a look at the numbers to understand how backing up your team with additional expertise is often a smart, strategic move that results in better deal outcomes for all parties involved.
Debt and Capital Advisory as Strategy, Not Distress
To begin, it’s worth acknowledging how this misconception came to be. In certain cases, it is true that struggling companies might turn to advisors for creative capital solutions or as part of a final effort to get back on track. Still, that’s only one part of the picture. The more accurate takeaway is that many companies with strong balance sheets and clear growth trajectories hire debt and capital advisory services simply to reduce friction in the debt process.
Our recent engagement data demonstrates that effect:
- More than 65% of companies that engage an advisor do so primarily to streamline the process of connecting with qualified lenders.
- Less than one-third of companies needed more than basic diligence preparation and planning before kicking off the deal process.
- In over 90% of conversations with growth-stage companies, 5th Line was not the first contact, whether it was instead with a bank, a private credit provider, or another advisor.
These numbers highlight the real reasons leadership teams choose to seek out debt and capital advisory: to save time and improve results.
Why Growth-Stage Companies Still Need Support
Today’s credit market offers more opportunity than ever, but it’s highly fragmented. With nearly 500 private lenders and banks lending in the growth-stage space, there are many potential paths forward for those looking to secure capital. That means finding the best lenders and navigating the process isn’t always easy, even for experienced CFOs.
Many CFOs at growth-stage companies have extensive experience with equity rounds and financial management. However, due to its more recent surge in popularity, many financial leaders have less hands-on experience sourcing private credit.
As a result, you might find that your team lacks the full bandwidth and visibility to run an efficient debt process from start to finish. Particularly for teams that rely on past contacts instead of initiating broad market searches, it can take significant time and effort to identify qualified, aligned, and available lenders.
A debt and capital advisory team can help uncover those matches faster, especially in a market that’s growing more competitive and nuanced. Based on time frames alone, even highly competent finance teams stand to benefit from advisor support and a smoother, more informed process.
Lenders: Rethink Your Assumptions
While many companies, lenders, and investors are supportive of private credit growth generally, they’re still not fully accepting the critical role of advisors. As of 2025, a lender sentiment survey showed that lack of alignment on purchase price (43%) and intense competition (36%) were the top two concerns among lenders. Those two key areas of deal execution stand to benefit significantly from advisor involvement.
Still, some lenders might immediately question a company’s financial position if an advisor is involved. However, instead of reacting to an advisor as a negative sign, lenders should be asking:
- Does the company show clear YoY growth?
- Are gross margins stable or improving?
- Is there a realistic path to profitability?
5th Line’s debt and capital advisory clients have seen an average growth rate of 25–30% year over year with steady or increasing gross margins and a clear path to profitability in 12–18 months. Despite that success, those companies still needed help securing non-dilutive capital, navigating crowded lending markets, and finding alternative options to scale when banks said no.
In these successful cases, an advisor isn’t rescuing a struggling team. We’re solving for lender fit, deal focus, and overall efficiency.
What Debt and Capital Advisory Teams Actually Do
The presence of an advisor is meant to support the entire deal process. This applies not only to the company but also to lenders and investors.
The most common reasons growth-stage companies partner with us include:
- Managing bandwidth during time-sensitive and resource-intensive processes
- Facilitating more efficient connections with the right lending partners
- Keeping the company on track and fully prepared for diligence and underwriting
When a debt and capital advisory team steps in, the goal is to help deals move faster and with less friction—and they often do. That’s because we support:
- Centralized, streamlined communication
- Effective preparation for each conversation
- Better and earlier alignment between lenders and companies
Taking a closer look at our data, we also discovered many teams only spoke with 2–3 credit firms or banks during the process. This is because qualified, well-matched lenders aren’t always easy to find. As leadership teams discover that challenge, some decide to engage advisors for the purpose of connecting with a better fit more efficiently.
A Signal of Sophistication
As we shift our perspective away from viewing debt and capital advisory support as a sign of weakness, consider this: In crowded, high-stakes environments, companies are choosing intentionally to invest in the tools and expertise that enable them to move faster and renew their focus on growth.
When it comes to finding lenders and raising debt capital, engaging an advisor to offer support and guidance toward the best strategies doesn’t mean a company is in trouble. It means you’re serious about finding the right partner, and it signals that your leadership team understands the value of process, precision, and relationships.
Final Thoughts
The idea that hiring advisors should raise suspicion is now outdated. The most successful companies today don’t wait until a critical problem appears to bring in support. They operate proactively, using debt and capital advisory services in advance to sharpen their financial strategy and improve the likelihood of a successful outcome.
As your growth-stage company looks to expand, invest in infrastructure, or explore non-dilutive funding options, 5th Line can help you move faster and preserve value without compromising on fit.
Interested in streamlining your financial operations or securing debt capital faster? Get in touch with our team to learn more.