Every wash project faces the same structural choice once the bank loan is sized: fill the remaining gap with more debt, or with a partner. Both work. They just cost different things.
The case for debt
Equipment financing and SBA-backed structures keep 100% of ownership with you — every dollar of upside stays home. The costs are cash-flow rigidity (payments arrive in bad months too), personal guarantees, and coverage covenants that constrain how aggressive your plan can be. Debt is cheapest when the pro forma has fat margins over the payment.
The case for equity
A partner’s capital doesn’t demand a monthly payment — it demands a share of what the project becomes. Equity fits when the gap is too large for coverage ratios, when the developer’s balance sheet is stretched, or when the partner brings more than money: land, contracts, or operating expertise.
The hybrid: equipment for equity
In select projects, LazrTek contributes its equipment as the equity — closing the gap without new debt while aligning the equipment supplier’s incentives with the project’s success. We only structure it where the feasibility math clears our own investment bar, which is the point: it’s underwriting with skin in the game. The structure is laid out in our equity partnership case study.
Let the numbers choose
The right stack falls out of the pro forma — coverage ratios, ramp risk, owner liquidity. Modeling those trade-offs side by side is the core of business planning and financing; the structure should be a calculation, not a temperament.
Go Deeper
