Three rules for using credit as a weapon, not a crutch
Lessons from the CFO of Fullstory, G2, and Salesloft
What does the future hold for business? Ask nine experts and you’ll get ten answers.
It’s a bull market. It’s a bear market. Rates will rise or fall. Inflation’s up or down. Can someone invent a crystal ball?
Over 43,000 businesses have future-proofed their business with NetSuite, by Oracle - the number one AI cloud E.R.P., bringing accounting, financial management, inventory, and HR, into one platform. With real-time insights and forecasting, you’re able to peer into the future and seize new opportunities. Whether your company is earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities.
Download the CFO’s Guide to AI and Machine Learning for FREE.
There’s been a noticeable shift in how finance teams think about debt.
Private credit is booming. Traditional banks, especially when pitching the middle market, have gotten more aggressive, not less.
As many of my CEO and CFO friends at PE backed companies have observed:
“Banks are on the offensive to get deals done. It’s go time.”
After the SVB fallout, everyone from JP Morgan to MUFG to credit funds like Hercules are chasing wallet share with more customized facilities, faster underwriting, and relationship-driven sales.
If you’re a CFO or CEO at a PE-backed company, odds are you’ve been pitched recently. Maybe it’s a revolver. Maybe it’s a structured facility with a friendly-looking headline rate and scary fine print. Maybe it’s a “bridge to a better future.”
But just because capital is available doesn’t mean it’s the right fit for your stack.
To unpack all of this, I sat down with Chad Gold, multi-time CFO with stops at Salesloft, G2, and now FullStory. During his time at Salesloft he completed a transaction to Vista Equity partners in a deal valued at $2.3 billion.
Chad has raised debt, paid it off, restructured it, and fielded his fair share of curious offers in between.
Here are three rules of the road from someone who’s used credit effectively, and seen how it can go sideways fast.
1. Set Up Credit Before You Need It
“I’ve always thought of credit like rainy day money. Not something you use; something you have.”
–Chad Gold
Every CFO I know has a story where a revolver saved their ass.
For me it was prepaying a large supplier to lock in a better cost of goods sold for the year, something that sprung up opportunistically when our supplier was facing a cash crunch.
It’s not about funding the plan you already built. That’s what term facilities you draw down at origination are for. It’s about jumping on an opportunity to capture upside, or protecting the plan when reality punches you in the mouth.
Maybe a strategic acquisition comes together faster than expected. Maybe churn spikes and you’re suddenly facing a cash timing issue. Maybe your board drops a surprise mandate to explore secondary liquidity or a tuck-in deal.
When those moments hit, the worst place to be is starting a lender diligence process from scratch. You don’t want to be twiddling your thumbs at the starting line.
That’s why Chad, and other CFOs who’ve seen a few cycles, always has a revolver in place. In fact, multiple CFOs tell me it’s something they do in the first six months of every gig. They call up the banking partners they’ve worked with before and start scoping it out. Even if it sits untouched for years. Even if the interest rate isn’t perfect. Because when the time comes, it’s not about a perfect rate; it’s about access.
Set it up when your metrics are clean and your leverage ratios look good. That’s when you get the best terms. Similar to how you want to get life insurance when you’re healthy, you don’t want to try to get underwritten when you’re sick. If you wait until you’re “bridging to something,” suddenly you’re negotiating from a position of weakness.
Credit is insurance against time, vendors, and uncertainty.
2. Avoid Structured Debt, Unless You’re Breakeven
“I’ve seen a lot of companies try to ‘bridge’ to the next round with structured capital. It almost never ends well.”
–Chad Gold
There’s a class of credit that looks clever on paper: convertible notes, preferred structures with PIK interest, 20% IRRs dressed up to feel like a soft landing.
They get sold as “not quite equity, not quite debt”; and they almost always show up when a company’s trying to avoid a down round.
But here’s the thing: if your business isn’t already close to breakeven, these products are a loaded gun.
You’re trading temporary dilution avoidance for permanent constraints. You might think you’re buying time, but what you’re really doing is locking in hard repayment obligations (with a clock that starts ticking the moment the wire hits).
Chad put it simply:
“If you’re burning cash, you shouldn’t be touching this stuff.”
Structured debt works if you’re stable. If you’ve got recurring revenue, a tight cash conversion cycle, and the ability to pay it back under stress. But if you’re still figuring things out? You don’t need a bridge; you need a reset.
And that can be accepting a down round.
Take it on the chin and go back to building.
There’s no shame in repricing. But there’s a ton of risk in kicking a heavy can down the road in sandals.
3. Consolidate to Get Better Terms
“You get the best terms when you bundle everything: cash, infrastructure, and facilities. That’s when the bank sees you as a real partner.”
–Chad Gold
A lot of finance leaders go shopping for the best deal, line by line.
One bank gets your deposits. Another provides your credit facility. A third handles your FX and international accounts. On paper, it feels like optimization. In practice, it’s a nightmare.
You lose leverage (and efficiency) when you’re fragmented. You waste cycles chasing different reps for different needs. And most importantly, you miss out on relationship-driven terms that only come when you consolidate.
Chad’s lived this firsthand: the best pricing he ever got came when he bundled everything: operating cash, cross-border needs, even treasury tools… all under one roof.
Why? Because the bank saw the full picture. They had visibility. They understood the business. They felt more comfortable because they understood the rhythm of the company and knew where things sat.
And when things got tight, they didn’t need three weeks of diligence to figure out whether to extend flexibility. They already knew.
In today’s environment, yes, banks are getting more aggressive, but they’re still humans. Humans who prioritize clients they actually understand. Which means getting to see the full chess board.
So stop chasing the perfect point solution.
Now, this doesn’t mean to just go to one bank and promise them all your business. But you allow them to compete for your business and then pick one or two banking partners, and go deep. That depth is what gives you leverage when it counts.
Building Bridges
The best time to build the bridge is before you need to cross it.
It sounds trite, but you don’t want to launch a public works project during a time of war.
That’s true for revolvers. It’s true for your lender relationships. And it’s definitely true when someone slides a structured term sheet across the table and tells you it’s “non-dilutive.”
Debt can help you win, if you’re honest about when you should start the game and what field you’re going to play it on.
Here’s the full interview with Chad Gold
Apple | Spotify | YouTube
Thanks for reading, and make sure to check out our sponsor, NetSuite.
Download the CFO’s Guide to AI and Machine Learning for FREE.
Your framework for using credit strategically - particularly establishing facilities before need and avoiding structured debt when burning cash - directly impacts working capital flexibility. TCLM examines similar dynamics through trade credit management and B2B payment operations that shape liquidity positioning. Might be useful if you're exploring that angle.
(It’s free)- https://tradecredit.substack.com/