What would you do if your biggest client suddenly told you they were extending payment terms from 30 days to 90?

The work’s finished. The invoice is sent. You’ve mentally already spent the money at least twice.

Then an email comes in. Friendly tone. Lots of appreciation for the work. And right at the bottom, almost as an afterthought: payment terms are now 90 days.

So the money exists. It’s just… not yours yet.

Meanwhile, payroll is still payroll. Rent still goes out. Software subscriptions continue helping themselves to your bank account at 2am. HMRC remains impressively punctual.

On paper, the business looks fine. In reality, timing is doing most of the heavy lifting.

Now imagine you get one call. Someone who’s dealt with this exact situation before. Someone who understands the gap between doing the work and actually seeing the money.

Who are you calling?

I’d probably call someone like Richard Branson.

Virgin launched over 400 companies. That’s 400 separate businesses, each with their own invoices, payroll cycles and uncomfortable timing gaps. He spent decades deciding when to bring money in, when to wait and how to keep things moving without losing control.

He understood something simple: revenue eventually shows up. The challenge is managing everything that happens in the meantime.

That situation we just talked about - where the business is healthy, but the cash hasn’t arrived yet - happens at every level. Even the BBC, with £169.50 a year coming in from millions of households, still had to raise external capital to grow.

1/ The BBC started as a normal private company with shareholders. The government later bought them out and replaced profits with the TV licence - £169.50 per household, every year. That gave the BBC something most businesses would kill for: predictable, recurring income.

2/ But predictable income didn’t mean unlimited flexibility. The licence fee could fund public broadcasting, but it couldn’t be used to expand the BBC’s commercial arm. The revenue existed, it just wasn’t available for that purpose.

3/ So in 2013, the BBC borrowed £170m instead. Seven-year term. Just 2.71% interest. The deal was oversubscribed 5x, meaning investors were lining up to lend. No shares issued. No ownership diluted. Full control retained.

4/ That’s the advantage of stable cash flow. When your income is predictable, borrowing becomes easier, cheaper and far less disruptive than giving away part of your company.

5/ Most businesses run into this in less obvious ways. Investor money comes with expectations. Grants come with restrictions. Even your own revenue arrives on its own schedule.

6/ Funding is less about access, more about structure. The BBC chose capital that solved the timing problem without creating a control problem.

£169.50 a year.

Whether you watch it or not. Whether you use it or not. Whether you’ve opened iPlayer once in the last five years out of pure guilt and immediately closed it again.

If you don’t pay, the letters start arriving. Friendly at first. Then slightly less friendly. Then written in a tone that suggests someone, somewhere, is becoming personally disappointed in you.

The BBC calls this “public service”.

From a business perspective, it’s something most founders can only dream of.

But it didn’t start like that.

In 1922, the BBC was just a company. The British Broadcasting Company Ltd. It had shareholders. It had investors. Radio manufacturers owned stakes because broadcasting helped sell radios. It was a commercial setup. Simple enough.

Then radio stopped being just entertainment.

It became how people got their news. How they understood the world. How information spread at scale. At that point, broadcasting stopped looking like a normal business and started looking more like infrastructure.

Governments tend to have opinions about infrastructure.

So they changed the funding model.

They bought the shareholders out. Removed equity completely. The BBC stopped existing to generate profit and started existing to provide a public service.

Instead of customers, it had licence payers.

Millions of them.

Every year.

Legally required.

Which, from a financial standpoint, is about as close as you get to guaranteed revenue.

If you run a business you can probably relate to spending years trying to build predictable income. Perhaps with subscriptions, retainers, recurring contracts, etc. The BBC, however, started receiving it by default.

But here’s the catch.

That money came with boundaries.

The licence fee could fund public broadcasting. It kept the system running. But it couldn’t just be redirected into anything the BBC wanted. It couldn’t freely fund expansion into commercial ventures or new revenue streams.

So even with all that reliable income, there were still limits.

The cash was predictable, but it wasn’t very flexible.

And that’s how the BBC ended up in a position most businesses eventually recognise - stable on the surface, but still needing capital to grow.

By 2013, the BBC had reached an interesting point. The core organisation was stable. Millions of households - whether they liked it or not - were still paying the licence fee every year, which meant the BBC wasn’t in danger of running out of money anytime soon. 

The income was predictable. Reliable. About as close to guaranteed as revenue gets.

But stability and growth aren’t the same thing.

The commercial arm of the BBC - the part that sells shows internationally, licenses formats, and generates revenue outside the UK - needed investment. Producing content costs money. Expanding distribution costs money. Staying relevant in a world that now includes Netflix, YouTube and every other streaming platform also costs money.

The obvious assumption would be that the BBC could just use the licence fee to fund that. Except it couldn’t.

That money was ring-fenced. It kept the public service side running, but it wasn’t there to fund commercial expansion. So even with millions coming in every year, the BBC still needed to raise external capital if it wanted to grow.

So, for the first time in its history, BBC Commercial Holdings went to the bond markets.

In June 2013, they raised £170M. Not by selling shares. By borrowing.

The terms were strong. Seven-year repayment period. Just 2.71% interest. The raise itself was split between £28M in sterling and $216M in dollars, which was then swapped back into pounds to avoid currency risk. It was structured carefully, and with none of the theatrics that usually surround capital raises.

And investors were eager to participate.

The deal was oversubscribed five times, meaning there was five times more demand than the BBC actually needed. Pension funds and insurance companies lined up to lend. From their perspective, it made sense. The BBC had something lenders care deeply about: predictable income. Licence fee revenue created stability, and stability made repayment feel safe.

Most importantly, the BBC didn’t give anything up to get that capital.

No shares were issued. No ownership changed hands. No external investors gained influence over strategy or direction. The organisation got the funding it needed and carried on exactly as before - just with more flexibility.

Beyond growth, this raise allowed the BBC to keep operating on its own terms. The media landscape was evolving quickly, and standing still wasn’t an option. The licence fee provided stability, but the bond raise provided freedom.

It solved the timing problem without creating a control problem.

You may not have access to forced, predictable revenue (or be able to send letters threatening court over subscriptions). But the advantage you do have is flexibility. You get to choose your structure.

A) Treat revenue as stability and capital as mobility

From the outside, the BBC looks financially untouchable. They have millions of households "subscribing" every year, backed by a legendary department of letter-writers whose tone shifts from "gentle reminder" to "we know where you live" with impressive speed. Seriously, whoever has the contract for sending those letters out must be the wealthiest person in Britain.

But here is the catch: Just because you have cash coming in doesn't mean you have cash to spend.

The BBC’s licence fee is legally ring-fenced for public broadcasting. It pays for the news and nature documentaries; it doesn’t pay for global commercial expansion. Even with billions in the bank, they were "cash-rich but growth-poor".

The lesson: Revenue maintains your status quo. Capital funds your future. They are two different tools for two different problems.

B) Remember that “boring” is sexy (to a lender)

In 2013, the BBC Commercial arm went to the market to borrow £170M. They secured an interest rate of 2.71%. To put that in perspective, that’s cheaper than most mortgages.

Why was it so cheap? Because the BBC is "boring". Lenders can see the steady stream of licence fees and know exactly how they’d get their money back. Investors were essentially tripping over each other to hand the BBC money.

So if your revenue is predictable (subscriptions, retainers, long-term contracts), you are "boring" in the best way possible. It gives you the leverage to demand cheaper money.

C) Audit the restrictions attached to your money

The BBC had billions in revenue that they legally couldn't touch for commercial growth. Many SMEs face a version of this: your revenue is already spoken for by payroll, rent and HMRC (who remain impressively punctual).

On paper, you look strong. In reality, you have zero flexibility. This creates the Illusion of Strength - you’re running a successful business, but you’re effectively "locked out" of your own profits because they’re already committed elsewhere.

D) Choose your pressure intentionally

Every time you take money, you’re choosing a specific type of pressure:

The BBC chose debt. They got the £170M, kept 100% of the control and once the loan was paid, the obligation vanished. 

Ownership is permanent; borrowing is just a phase.

E) Dig the well before your thirsty

The BBC didn't wait until they were broke to raise capital. They did it while they were stable, which is exactly why they got such a sweet deal. This is something I’m consistently telling people who come to FundOnion for financial support - bake equity and debt into your strategy early. 

But you do have me. If your business has predictable income and you want to use it to unlock capital without giving away ownership, feel free to email me. I love helping SMEs work through these kinds of challenges.

Till next time,

James