Financing: owners of small consultancy used infusion of cash to reinvent the business and hire staff to carry out their vision.

• Position: Cook Consulting

Many small businesses use receivables to meet all their operating needs, and sometimes even to finance expansion. This is especially true of service or consulting businesses that have few if any employees and don't maintain product inventory. Cook Consulting of Hickory ran this way for about 22 years, until owners Stewart and Tammy Cook decided in 2012 to transform from a three-person consultancy into a software-as-a-service business. Within a year, the Cooks were looking for a cash infusion to fund the transformation, which would, according to Stewart Cook, "let us scale the business and easily support our products from our location."

Although they considered working with angel investors, the Cooks didn't want to give up any equity in the company at the time. They decided instead to apply for a line of credit at Community One Bank. Having financed internally since Tammy Cook founded the company in 1993, they were a little taken aback by the intensity of the process. They provided the bank budget projections for five years, business and personal tax returns for the previous three years, and met with their loan officer, Darryl Johnson, three or four times, Stewart recalls. Although it took eight months to secure the line of credit, which was approved in the spring of 2014, Stewart says Johnson and the bank "were great to work with."

In the months following the line-of-credit approval, Cook Consulting launched a service called the App Garden, a suite of administrative software designed for public school districts. The Cooks have used $410,000 of the credit line so far, in part to support nine new positions: five sales reps, two implementation specialists, and two customer-support reps. Employment now stands at 18. "We've outgrown space in two different buildings, and we'll have to move soon," says Stewart. Although the company owns its current building, the Cooks might consider renting if they find a space that's perfect for them.

Cook Consulting has come a long way from its earliest incarnation as a one-woman shop. A former software developer for IBM Corp., Tammy Cook started consulting after her first child was born as a way to better balance her work and home life. Since the K-12 market was her focus at IBM, she chose to specialize in that area. Most of her clients were N.C. school districts that needed software to compile and submit various reports to state and federal agencies. She created a customizable Excel program that today is used...