An AI project can require cash well before it produces measurable savings or additional sales. Software subscriptions, data preparation, equipment, implementation and employee training all need a place in the budget. So does the cash required to keep paying employees and suppliers while the project is underway.
Before committing, separate the proposed spending into clear categories, identify how any borrowing would be repaid and test how much operating cash remains if the project takes longer than expected. That planning can help you decide whether to proceed, start with a smaller pilot or wait.
Research and program information checked as of October 10, 2026.
What the research says about funding AI
In an October 2, 2026 blog post, European Central Bank researchers reported that 72% of surveyed euro-area firms planning AI investment expected to use internal funds, including cash flow or retained earnings. The survey covered about 5,000 euro-area companies, and respondents could select more than one financing source. The figure describes financing intentions among a specific group, rather than the share of AI spending paid in cash. It is not a U.S. business statistic. ECB research
The researchers also found an association between investment type and external financing: firms planning spending on AI technologies, tools and data infrastructure were more likely to combine internal and external funds. This does not establish that lack of collateral caused a particular company to self-fund. ECB analysis
For a business owner, the useful question is what each part of the project requires from the balance sheet. The planning framework below is an approach to that decision, not a prediction of financing approval or investment returns.
Separate the costs before choosing financing
Start with a complete list of commitments. Depending on the project, that list may include:
- Servers, networking equipment and other hardware
- Software licenses, cloud services and usage-based fees
- Data cleanup, system connections and cybersecurity work
- Consultants, developers and internal staff time
- Employee training and changes to existing workflows
- Testing, ongoing monitoring, maintenance and contingency
For each item, record the payment date, who owns the resulting asset or work, the period of expected use and what happens if you stop the project. Ask whether the cost can be reduced or canceled, and whether any part of the purchase could be transferred or sold.
A server purchase, a cloud subscription and employee training require different questions. Equipment needs a realistic useful-life estimate. A subscription needs a review of recurring charges and renewal terms. Training needs an explanation of how employees will use the new skills and who will measure the result.
Keep implementation costs separate from continuing operating costs. A pilot that fits within a one-time budget may still be difficult to sustain if its production version requires additional licenses, ongoing consultants or more expensive usage levels. Obtain written estimates for the expected operating volume, including the cost of support and human review.
Establish what supports repayment
For a secured borrowing proposal, ask the lender which assets it will accept, how it will value them and what documentation it requires. Avoid assuming that a purchase price will translate directly into borrowing capacity.
Intangible assets are not automatically excluded. The Office of the Comptroller of the Currency describes circumstances in which intellectual property can support asset-based lending, while noting valuation and ownership challenges. Training and an unfinished implementation should not be assigned a recoverable value without a lender's assessment. OCC asset-based lending handbook, pages 19–20
Also identify the cash flow that would make the payments. Prepare a case using the business's existing operations, then show the expected project benefits separately. If repayment depends on a forecast improvement, make that dependency clear.
A useful financing discussion should answer four questions:
- What specifically will the money pay for?
- What cash flow or other agreed source will repay it?
- How much operating liquidity remains if the project is delayed?
- What spending can management stop or reduce if results disappoint?
Calculate the cash cushion after the investment
Self-funding avoids a new loan payment, but it still needs a liquidity test.
Consider this hypothetical example, in U.S. dollars. A company has $6 million in unrestricted cash and has determined that it needs to retain $3.5 million for its ordinary operations. It pays $2 million for an AI project. Assuming no other cash inflows or outflows during that period, its cash falls to $4 million, leaving $500,000 above its operating reserve.
The project is within budget. The company's remaining cushion may still be too small for a customer-payment delay or an unexpected inventory purchase. The appropriate reserve will depend on the business; the $3.5 million figure is an assumption for this illustration, not a benchmark.
Map the timing of vendor payments, expected operating benefits and any debt payments on the same calendar. Allow for a period when project costs and ordinary business expenses overlap without any savings from the new system.
The Federal Reserve Banks' 2026 Report on Employer Firms provides useful financing context. In its 2025 survey, 60% of small employer firms sought financing during the preceding 12 months; 42% of applicants reporting outcomes received the full amount sought. Among firms with debt, 59% reported personal guarantees and 51% business assets as security, with multiple responses allowed. These are weighted findings from a convenience sample, not AI-specific financing outcomes. Federal Reserve Banks report, pages 9–10 and 14
The planning implication is to investigate financing before the cash is committed. An expected loan approval should never be counted as available cash.
Match each funding option to the planned use
Equipment loans and leases
For identifiable equipment, ask whether an equipment loan or lease is available and compare the full payment schedule with the period you reasonably expect to use the asset. Review the deposit, fees, insurance obligations, end-of-term options and cost of an early exit.
Technological obsolescence and the equipment's residual value are among the risks addressed in the OCC's lease-financing guidance. A useful-life assumption deserves particular attention when equipment is closely tied to a specific application or vendor. OCC lease-financing handbook
Ask who owns the asset, whether software rights transfer with it and whether it would remain useful if you changed the AI system. Avoid borrowing over a long period solely to make the monthly payment look smaller.
A working-capital line
A line supported by eligible receivables or inventory may help fund the operating cycle. Its usable capacity depends on the loan agreement and borrowing base. The stated credit limit alone does not show what the business can draw; eligibility, advance rates, reserves and the outstanding balance matter. OCC asset-based lending handbook, pages 15–21 and 73
Ask the lender to show available borrowing under both the expected case and a case with slower collections. Review restrictions on permitted uses, required reporting and renewal or maturity dates.
Keep enough room for ordinary business needs. If an implementation will tie up funds for several years, examine whether the proposed line can support that commitment throughout the period. Do not assume it will renew on the same terms.
Term debt supported by the business
A term loan deserves consideration when the existing operation can support the proposed payments. Test repayment with lower sales, a delay in project benefits and, where applicable, higher variable-rate payments. Include existing debt and the cost of any required guarantees, collateral and fees in the review.
For eligible U.S. small businesses, the SBA's 7(a) page lists working capital and machinery or equipment purchases and installation among permitted uses. As of October 10, 2026, the equipment category explicitly includes AI-related expenses. That wording does not establish eligibility for every software, training or consulting bill; confirm each proposed use with the participating lender. The business must satisfy program requirements and demonstrate a reasonable ability to repay. SBA 7(a) program
Ask for the lender's treatment of each budget item before signing a vendor contract in reliance on an SBA-backed loan. The loan guarantee supports the lender; it does not remove the borrower's repayment obligation.
Cash and owner or outside equity
For an early experiment with uncertain results, consider a smaller cash-funded phase or capital that can tolerate the uncertainty. Set an amount the business can afford to lose without disrupting operations.
Outside equity involves giving up an ownership interest in exchange for funding. The SBA distinguishes that arrangement from borrowing that must be repaid with interest. SBA investment-capital overview
Before considering any proposed investment, review dilution, voting control, required distributions, information rights and exit provisions with appropriate advisers. Ask what happens if the business needs more money or the project changes direction. Avoid assuming that an arrangement described as equity has no cash commitments.
This is a general comparison of funding structures. It does not offer an investment or imply that Apex arranges equity placements.
Include vendor terms in the cash plan
Review the proposed contract alongside the financing budget. List deposits, implementation charges, minimum usage commitments, automatic renewals and any termination charges that apply.
Where practical, ask for payments tied to defined deliverables and acceptance tests. Identify what you must pay if delivery is late, integration fails or the pilot does not meet your requirements. Have counsel review material obligations and the scope of any promised remedies.
Pay particular attention to the point at which a limited trial becomes a larger commitment. An internal decision to stop spending does not cancel an obligation already signed. Base the cash forecast on the actual contract, including notice periods and charges that continue after termination.
Release money in stages
A practical way to limit exposure is to approve the work in stages:
- Confirm that the necessary data and systems are ready
- Run a limited pilot with specific users and tasks
- Compare results with an agreed baseline
- Expand to a defined part of the business
- Consider a broader rollout after reviewing the evidence
Give each stage a spending limit, a responsible manager, a completion test and a decision date. Include the cost of closing the pilot or returning to the prior process if the test fails.
Use measures connected to the business case. These might include the time required to process an order, the cost of correcting errors or the number of customer requests resolved accurately. Distinguish time saved from cash saved: record how an efficiency gain will change actual spending or support additional revenue before including it in repayment forecasts.
Include accuracy, security and ongoing review in the project budget. NIST's voluntary AI Risk Management Framework addresses evaluation and risk management throughout the AI lifecycle; it is a useful reference for questions to put to the technical team. It does not establish that a project will be profitable or qualify for financing. NIST AI Risk Management Framework
If a lender agrees to staged funding, review the conditions for each draw. A later phase should not rely on funds whose release conditions the business may be unable to meet.
Model the project and the whole company
Prepare two connected forecasts.
The project forecast should show implementation costs, continuing fees, staffing requirements, expected benefits and the timing of those benefits. State the assumptions behind each claimed saving or additional sale.
The company forecast should show cash collections, payroll, supplier payments, taxes, existing debt, proposed debt and other planned spending. Include borrowing availability separately from cash on hand, with any conditions clearly identified.
Then test a combined downside scenario. For example, assume that implementation costs rise, benefits arrive two quarters late, ordinary sales weaken and borrowing availability falls. Those are illustrative stresses; use amounts and delays that fit your business and explain why you chose them.
If the result leaves the company below its minimum cash reserve, revisit the scope and timing before making the commitment. Options to assess include a smaller first phase, a larger reserve, revised vendor terms or a different financing structure. Some projects may need to wait.
Apply the same review to a property project
For a commercial property with an automation or technology component, prepare separate budgets for building work, equipment, software, implementation and operating reserves. Ask each proposed lender which costs it will fund and under what conditions.
For example, a hypothetical warehouse upgrade might involve installed equipment, software integration and staff training. The sponsor should verify which borrower entity will own each item, which entity owes the vendor and whether existing loan documents permit the new borrowing or liens.
Have counsel and the lenders review any overlap in collateral. Keep the construction schedule, equipment delivery, testing and expected operating start date aligned in the cash forecast. Do not count projected rent increases or operating savings until their assumptions and timing have been assessed.
Prepare for the financing conversation
Bring a concise explanation of the project and a complete budget. Include current financial information, existing debt obligations, vendor proposals and a forecast showing the proposed payments.
Be ready to discuss:
- The business problem the project is meant to solve
- The cash flow available for repayment before projected benefits
- Ownership or licensing of important technology and data
- Dependence on individual vendors, employees or customers
- Minimum operating cash and available borrowing under stress
- Milestones for approving additional spending
- The cost and practical steps involved in stopping the project
Confirm the specific documents and requirements with the lender. A well-prepared request supports a clearer discussion, but it does not assure approval or favorable terms.
Seven checks before committing
- List every use of funds. Include implementation, recurring costs and contingency.
- Establish the baseline. Record current costs and operating performance before estimating improvements.
- Set spending stages. Define what must be demonstrated before the next commitment.
- Protect operating cash. Test a project delay together with a business slowdown.
- Confirm repayment and permitted uses. Check the proposed structure with the lender.
- Review vendor obligations. Understand renewals, minimum charges, acceptance tests and exit costs.
- Document the fallback. Decide what management will reduce, stop or defer if results fall short.
AI spending should leave the company able to operate while management tests whether the investment is worthwhile. A financing plan is useful when it makes that trade-off visible and gives the owner a realistic choice about the size and timing of the commitment.
Discuss your business financing needs
Apex Commercial Funding is a commercial-finance broker. For questions about business financing, contact James Fillmore II at 240-535-9291 or James@apexcommercialfunding.com.
This article provides general information, not financial, investment, legal or tax advice. It is not a commitment to arrange or provide financing. Availability and terms depend on the specific transaction, borrower qualifications, applicable requirements and lender approval. Consult appropriate advisers about your circumstances.
