Every big company eventually hits a choice: fix the problem or keep scheduling meetings about the problem (without actually getting anywhere).

In 2006, Ford finally chose the first option.

The business was in clear decline. Sales were falling, costs were rising and the turnaround plan wasn’t improving any number that actually mattered. To make things worse, the global economy was months away from the biggest financial crisis since the 1930s.

Most companies in that position raise a token amount, trim a few budgets perhaps. Ford skipped all that and went straight to the nuclear option:

Raise $23.4B and put the entire company up as collateral.

Factories, machinery, patents, trademarks, distribution, tech - and the Blue Oval logo you’ll see at least three times per minute on the A1 - all included. If the plan failed, lenders wouldn’t get a slice. They’d get Ford.

And for all the noise about how risky this deal was, it was the timing that saved them. They closed the raise in late 2006, right before credit markets froze. When the crisis hit, GM and Chrysler queued for government bailouts. Ford already had cash, options and control.

This is the part founders tend to underestimate:

Debt becomes dangerous when you delay it, not when you take it early.

So before you convince yourself you don’t need funding yet, keep scrolling to learn more about:

Ford didn’t just decide to be an “asset-rich” company in 2006. They spent a century building factories, distribution networks, technology, brands and a global footprint. By the time they needed cash, they actually owned something worth borrowing against - which already puts them ahead of half the pitch decks floating around today.

Some of the value came from decisions that looked ridiculous at the time.

In 1914, Henry Ford introduced the controversial $5 daily wage; double the industry rate and paired with an unheard-of eight-hour workday. Business leaders mocked it as overpaying workers who “should be grateful for a job”. Then turnover dropped sharply, productivity surged and profits improved. That decision bought workforce loyalty. 

People love to talk about “intangible assets” - this one literally generated returns for a century. 

A strong legacy doesn’t protect you from weak performance, however. By the early 2000s, Ford was spending more than it was making. Labour costs were rising, sales were dropping and the business was losing market share to cheaper, more efficient competitors from Japan and Europe. In Q2 2006 alone, Ford posted a $254 million loss while still claiming it had a turnaround plan.

At that point, the problem wasn’t brand, product or heritage - it was cash. They were running out of money faster than they could fix anything.

When a business can’t fund its own recovery, someone else steps in and funds it for them. And whoever funds it, controls it. In Ford’s case, that would’ve meant government intervention, forced restructuring and losing strategic independence during the biggest downturn in modern finance.

That’s why the raise was make-or-break. It wasn’t made for headlines. It was a financial move to make sure Ford answered to itself, not to a bailout programme with conditions attached.

To get lenders to hand over $23.4B, Ford had to build a structure even the cautious lenders could say yes to:

That combination involved matching lender appetites so everyone felt they were getting the best possible deal.

And this part’s important: the only reason this stack worked is because Ford had real assets. A pre-revenue startup can’t do this by pledging a prototype and a three-year plan.

Ford could.

When the 2008 crisis hit, Ford had a choice: join GM and Chrysler in the bailout queue or rely on the liquidity they’d secured ahead of time. They chose autonomy. No political oversight, no government-imposed restructuring and no ministers trying to understand the difference between a model refresh and a plant shutdown.

GM and Chrysler accepted bailouts.

Ford kept control.

The difference? Timing - and the willingness to make a decision most companies would never consider.

By that point, small moves wouldn’t have helped them anyway. Polite, “safer” financing decisions only delay the decline; they don’t change the direction of it. 

Ford’s all-in collateralisation looked extreme, but it maximised their leverage while they still had negotiating power. That single decision meant they could run their own restructuring instead of reacting to someone else’s version of it.

What made me laugh when I posted about this on LinkedIn was how many other business owners instinctively understood the point: the bigger risk is usually not taking the decisive option.

And they’re right, even if Ford wasn’t on their mind at the time.

The move looked reckless from the outside. But doing nothing - or doing too little - would’ve been far riskier.

The point of these case studies isn’t admiration, it’s application. So here’s your takeaways:

If you wait until things get urgent, negotiation is out the window. You end up accepting whatever terms the lender writes down first, since your leverage disappears the moment your cash flow does. 

I work with both types of business owners at FundOnion: the ones who raise early make calm, strategic choices; the ones who wait make decisions based on panic and declining sleep quality. Only one of those groups gets good terms.

Equity feels friendly until you realise it’s the most expensive capital you’ll ever take. Debt - taken early, when you still have leverage - protects control far better. Founders romanticise bringing on investors right up until they meet their first board pack. 

Ford avoided dilution entirely by using non-dilutive instruments while they still had the balance sheet to support it. There’s a reason the company still has the same name on the building.

Most SMEs assume collateral begins and ends with equipment and inventory. Lenders don’t think like that. Contracts, recurring revenue, IP, machinery, property, even workforce stability all contribute. 

Henry Ford understood this in 1914 when he introduced the $5 daily wage. Everyone mocked him, but it reduced turnover and boosted productivity - which is what intangible asset value actually looks like. Invest in people early and they become an asset, not a variable cost you panic about every quarter.

Term loans do one job. Revolvers do another. Asset finance does another. Mix them properly and you build flexibility. Rely on one instrument and you’ll eventually back yourself into a corner - usually at the worst possible time. 

Ford combined three different structures because no single lender type would deliver $23.4B alone. SMEs don’t need billions, but they do need optionality. “One facility solves everything” is the business-finance version of magical thinking.

Convertible structures look clever on a whiteboard and deeply inconvenient in real life. They work for big listed companies because the lender can exit by selling shares. In an SME? You’ve just given a lender equity in a business they can’t sell, can’t exit and now have opinions about! 

Keep it simple unless you want a minor shareholder who turns up asking about EBITDA.

Yes, another point about timing because it’s important. 

Ford’s raise looked extreme, but only because they did it early, while they still had leverage. Most businesses wait too long, then wonder why every option feels terrible. I’ve had lots of calls at FundOnion where a prospective client says they’ll raise “later”, then realises the cost of waiting is much weaker options.

If you fix funding early, you control the terms. If you fix it late, you take whatever you’re given and pretend it was part of the plan.

Terms aren’t handed down from the heavens. They’re negotiated. And like any negotiation, the person with options wins. Ford had assets, liquidity and timing - so they got the deal they wanted. 

SMEs with a plan, clean numbers and early timing get better terms too. SMEs who show up late with surprises do not. It’s not complicated; people just hate hearing it.

A quick recap for those with short attention spans:

A) Ford raised $23.4B in 2006 by pledging almost everything it owned - factories, patents, tech, even the Blue Oval logo you see on every commute.

B) They did it before the financial crisis, which meant they had cash while everyone else was panicking.

C) The financing worked because it mixed term loans, revolving credit and convertibles, giving every type of lender something to say yes to.

D) GM and Chrysler took bailouts. Ford didn’t. They kept control because they raised early.

E) If you run an SME: raise before you need to, use debt before equity eats your company and remember your assets go further than you think - if you actually use them.

No, not really. But someone once asked me what the title of it would be if I did. My first thought was something dramatic like Finding Yourself, which lasted all of four seconds before I realised how unbearable that sounded. In reality, the far more accurate title would be something like Trying Things Without Reading the Manual.

Because, truthfully, that’s how I started my business. I wasn’t prepared. I didn’t have a perfect plan. I definitely wasn’t waiting for “the right moment”. I just knew my old job wasn’t it, life had shifted and doing nothing felt worse than taking the risk.

It’s funny - founders romanticise certainty, but every useful decision I’ve ever made has involved none of it.

Anyway. Back to Ford.

Ford’s strategy worked for one simple reason: they used their leverage while they still had some. They raised early, raised big and bought themselves enough breathing room to survive a crisis that wiped out everyone who waited.

Doing too little is often the riskier option. Put it this way: it’s better to check your options now than explain your options later.

Till next time,

James