For most founders, capital immediately brings to mind equity funding. Debt, on the other hand, is often misunderstood—sometimes even viewed negatively. But in reality, debt is one of the most effective ways to fund growth without giving up ownership.
Unlike equity, debt financing allows you to raise capital while keeping your cap table intact. Whether through a business loan or a line of credit, debt can provide the liquidity your company needs to scale, meet working capital requirements, or seize short-term opportunities—without diluting your stake.
That said, debt is a financial commitment. The capital raised must be repaid within a set period, along with interest. But in return, you retain full control over decision-making and the direction of your company.
At LVX Debt, we help founders unlock the power of non-dilutive capital. Here’s a quick checklist to ensure your business is debt-ready before you start your journey.
Make Sure Your Business is Registered
To access debt under compliance with the Companies Act, 2013, your startup must be a registered entity. Lenders rarely work with unregistered businesses, as it raises potential risks around tax and legal obligations.
When preparing to raise debt, create a compelling pitch deck:
- What your business does
- Traction and early wins (customer acquisition, pilots, revenue streams)
- How debt will accelerate growth
Transparency and clarity are key.
Keep Your Numbers Ready
Founders who know their numbers instantly build credibility. Before approaching lenders, prepare:
- Profit & Loss statement
- Balance sheet
- Burn rate and runway
- Outstanding debt, if any
- Projections and business plan
Numbers don’t just reflect past performance—they demonstrate your vision for sustainable growth.
Prove Your Business is Credit-Worthy
Your credit score (or commercial score) is a crucial factor in determining loan eligibility. In India, this is measured through the CIBIL score.
At LVX Debt, we typically require a minimum score of 685 to begin the process. A strong score signals that your business is disciplined, reliable, and capable of repayment.
Prepare the Right Documentation
Lenders value transparency and thoroughness. To move smoothly through the debt process, keep the following ready:
- KYC of directors or key shareholders
- Company documents (GST certificate, incorporation certificate, audited financials, MIS reports, bank statements)
- Proof of address (registered certificate address must match your operational site)
Lenders will also conduct in-person verification before disbursing funds.
Final Word
Debt is not a burden—it’s a growth tool. With the right preparation, startups can unlock capital without sacrificing ownership.
At LVX Debt, we’re building a transparent, founder-friendly platform for pure-play debt, designed specifically for startups and emerging businesses.
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