5 Capital LeversTitle: The 5 Capital Levers Every Small Business Owner Has (But Most Misuse)

If you’re running a business—whether it’s in real estate, services, lending, or anything in between—you’ve probably faced the question:

How do I get more capital to grow?

There’s noise everywhere. Investors. SBA loans. Credit cards. Equity. Bootstrapping.

But when you really boil it down, every business—no matter how big or small—has the same five ways to capitalize growth.

Some are slow. Some are fast. Some come with strings.

The key is knowing which lever to pull at the right time.

Here’s how I think about it inside 42 Solutions and Kennard Capital—and how you can apply the same logic in your own business.

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1. Personal Capital (The Foundation)

This is your own money. It’s the cleanest, most flexible, and most empowering form of capital you can use.

For me, this includes cash pulled from selling or refinancing properties, syndication exits, and business savings I’ve accumulated.

Why it matters:

You keep full control. You keep all the upside. You take all the risk.

It’s slow to build—but it’s the cornerstone of real ownership.

Use it for:

Seeding new ventures, taking asymmetric shots, or unlocking time-sensitive opportunities.

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2. Reinvested Profits (The Engine)

If your business is making money and you’re not reinvesting it—you’re breaking the flywheel.

At 42 Solutions, I track my income across entities monthly. Whatever isn’t allocated to taxes, reserves, or lifestyle gets reinvested into new deals. It’s how I quietly build momentum, even when I’m not raising or selling anything.

Why it matters:

This is how wealth compounds—inside your business.

Not in the market. Not in someone else’s deal. In your machine.

Use it for:

Scaling operations, increasing margin, or deploying into high-return opportunities you already control.

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3. Investor Capital (The Accelerator)

This is where most entrepreneurs get distracted—or overwhelmed.

There are a ton of ways to bring in capital from others:

• Equity partners

• Loans from friends and family

• Revenue share agreements

• Deal-by-deal profit splits

• Structured note programs

• Joint ventures or limited partnerships

There’s no one-size-fits-all answer—but the common mistake is giving up too much too early, or building a business that can’t survive without constant fundraising.

How I use it:

At 42 Solutions, I bring in investor capital in three ways:

1. Direct loans to the company that I control and deploy

2. Profit-sharing deals tied to specific loans I fund

3. Opportunities for investors to hold interest in deals I originate and manage

This capital helps me stay nimble and fund more deals—but I only use it when my own capital is already fully deployed and the deal margin makes sense.

Use it for:

Scaling without diluting. Accelerating velocity when timing matters. Bringing in partners aligned with your mission—not just your money.

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4. Lines of Credit (The Multiplier)

Most people either avoid LOCs completely or use them recklessly.

But a smart, well-managed line of credit can be the most valuable capital tool in your arsenal. It gives you leverage on your timing, so you can move fast, cover gaps, or float projects that are about to produce income.

At this stage, I’m focused on:

• Business lines of credit backed by my operations

• Asset-based credit secured by my portfolio of loans

I’m phasing out older LOCs that were tied to real estate, because they’re less flexible and less scalable in the long run.

Use it for:

Bridging working capital gaps, accelerating delivery, or recycling cash faster—but only if your margins are dialed in.

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5. SBA Loans (The Rocket Fuel for Traditional Businesses)

If you run a more traditional small business—brick and mortar, services, contracting, e-commerce—the SBA loan might be the best deal available.

These loans are backed by the government, offer long terms (10–25 years), and come with rates most private lenders can’t touch.

The most common types:

• SBA 7(a): General working capital, growth, or acquisition

• SBA 504: Commercial real estate and equipment

They take time and documentation—but they can provide huge upside if you qualify.

Use it for:

Buying or expanding a business, acquiring equipment, or refinancing more expensive debt.

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Final Word

Every business owner has access to these five capital levers.

You don’t need venture capital.

You don’t need to over-leverage.

You just need to think like a capital allocator, not just an operator.

The best business owners I know don’t use all of these at once.

They know which one to pull, and when to pull it.

That’s how you scale with control—and stay in the game long enough to win.

– DK