Shōkunin Capital Access · Strategic Planning

July 20, 2026

$96,000/Month

A competitor announces a $3MM facility at 1% a month. You are paying 30% on a merchant cash advance. The gap between you is not access.

Photo by Çağlar Oskay on Unsplash

The “deal closed” post came across the feed. A clean graphic showing what you would understand as healthcare and a tablet showing a growth chart. Another successful closing. A \$3MM growth capital facility, 36-month term loan for a leading wellness brand. Underneath it, the deal highlights sat in a tidy row of icons. Monthly payments. Cost of capital, 1%/month. No prepayment penalties. No personal guarantee and only one financial covenant: maintain minimum liquidity.

Somewhere a business owner in the same category looked at that graphic and did the math the way most people do it. She looked at the 1% interest rate and multiplied it by 12 and thought about the 30% rate she is currently paying on a merchant cash advance, and then thought about her own bank, which stopped returning her calls, and arrived at the conclusion that cheap capital goes to the companies that need it least, and that whatever gets you into that room is not something anybody was going to hand her.

Start with the payment. $3MM amortizing over 36 months at 1%/month is roughly $96,000/month, or $1.2MM/year in debt service, before a dollar of it goes anywhere near marketing or payroll or a new location. A lender writing that ticket unsecured wants coverage of at least 1.25 times, and closer to 1.5 if the sector makes it nervous. Work backward and the borrower is producing somewhere between one and a half and two and a half million dollars of EBITDA. Cross-check it against leverage, because these facilities rarely go past two or three times cash flow, and you land in the same band. In a direct-to-consumer wellness business where gross margins run 60-80%, but customer acquisition eats most of the difference, that implies trailing revenue somewhere between $12-25MM.

The number that actually tells the story, though, is the one people skip. No personal guarantee.

Nobody waives recourse on $3MM because they liked the deck. A lender releases the founder’s house from the equation when the trailing 12 months of financial statements can carry the loan without it. The company had cohort data. It had a customer acquisition cost with a payback period short enough to justify lending against marketing spend, which is the hardest kind of money to lend because marketing converts into nothing you can repossess. It had refill revenue, which in this category is the whole ballgame, because a patient on a maintenance protocol is an annuity and a patient who churns at month four is a bad debt in a nice font. The lender did not fund a growth story. It funded a proven one and then priced the risk that the category shifts underneath it.

Now hold that graphic next to another company in the same category.

A physician with a strong local reputation and a proven cash-pay weight loss line inside his existing practice. A partner running the operating entity. A management company structure, a clinical entity, a plan for multiple retail-adjacent locations, a real thesis about where to put them. The original raise was two million dollars for forty-nine percent of the management company, which implies a post-money valuation right around six million. The financial model was built against that number. Every downstream calculation in it, per-share economics, dilution, exit scenarios, all of it anchored there.

The raise closed at five hundred thousand dollars for 50%.

Post-money, roughly $1.07 million. About one sixth of the original framing. The money came from individuals, one of whom may have funded part of his contribution through a personal line of credit. That is not institutional capital. That is an “I know a guy” situation, and the reason the check was that size is not that the business is bad. The business may turn out to be excellent. The reason is that on the day the capital conversation happened, there was nothing to underwrite except intention.

Same industry, molecules of weight loss miracles, and demographic tailwind. One company gets three million unsecured at roughly twelve percent nominal, with no guarantee, and the freedom to refinance out any time it wants. The other gets a family check at a valuation that would embarrass a lemonade stand. The delta is not access. It is not who knows whom. It is that one of them could open a folder.

There is a third data point in that same orbit, and it is the most instructive one. The physician’s existing medical practice, the profitable one, the one with the reputation, was carrying three merchant cash advances. Roughly \$300K at a mid-30s rate of interest. Combined debt service of about $20K/month, or $240K/year. And that structure did not surface in a lender package or a board meeting. It surfaced when the bookkeeper was asked, well into diligence, to clarify the debt schedule.

That is the whole essay in one paragraph. A practice with real revenue and a real patient base was paying north of 30% for working capital because it took the money that would say yes in forty-eight hours, and nobody in the building could produce a clean debt schedule on request. When the capital conversation finally got serious, the first thing that had to happen was an archaeologic dig into historical financials to see if the math was mathing.

The market for capital is not a ladder with MCAs at the bottom, SBA in the middle, and banks at the top. It is a market that prices information. Every rate you are quoted is a lender’s estimate of how much it does not know about you, converted into basis points. An MCA at 30% is not predatory in the way people usually mean. It is expensive because the lender is underwriting a bank statement and a prayer, and it has priced accordingly. A $3MM unsecured facility at 1%/month is cheap for the same reason in reverse. The lender knew enough to stop guessing.

Clean monthly closes, not a shoebox reconciled in March. A debt schedule that lives in one place and is current. Revenue disaggregated by service line, so that when a lender asks what happens if the lead product gets disrupted, the answer is a number and not hand waving and hoping your charisma is enough. Client retention, because in any recurring-revenue business the churn curve is the credit analysis. Customer acquisition cost with an honest payback period. A bookkeeper who closes the month and a CPA who reviews the year and an owner who can answer a question about gross margin without asking someone to pull it up.

And a growth path that survives the obvious question. The single-modality clinic works in 2026. It is exposed by 2029, when the compounded supply economics have shifted and insurance coverage for the branded product has expanded and the patient who graduated at month eighteen has no reason to come back. The company that got $3MM was, whether it framed it this way or not, being asked to prove it could outlive its own lead product. The one covenant on that facility was minimum liquidity. Not leverage or fixed charge coverage, where a company’s cash flows are sufficient to cover its interest expense. Liquidity, which is what a lender asks for when it is not worried about the borrower’s discipline but is worried about the category’s floor falling out.

The struggling owner reading that graphic assumed the funded company was rewarded for being successful. It was not, exactly. It was rewarded for being able to answer the questions to understand the risk profile and price it accordingly.

Shōkunin, Inc. · 751 Camino Durango, Thousand Oaks, CA 91360
This note is provided for general information and is not investment, legal, or tax advice. Deal terms described are illustrative and do not identify any client of the firm.