Structures

SaaS Funding’s provides senior and subordinated amortizing loans with terms ranging from 6-to-36 months depending upon size and growth. SaaS Funding will also selectively evaluate bridge lending opportunities and other special situations. Loan size range from $250k to $3 mm with the ability to provide additional tranches based on performance. SaaS Funding has the ability to participate in larger transactions by working with strategic partners.

Unique Point of Difference – Senior to Subordinated

SaaS Funding’s flexible lending products are meant to fill the void left by traditional senior lenders as well major venture debt firms. SaaS is equally comfortable in senior and subordinated and in many transactions will start as senior lender to finance a company to its desired long-term senior lender and then subordinate.

Subordinated Debt Capabilities

We have market leading capabilities in offering subordinated debt to bootstrapped software and tech companies that have capital needs between $250k and $3 mm. We work in partnership with senior lenders to finance additional capital needs in order to stretch equity or create exponential value. We are focused on being a “lead in” or “in addition to” a senior lender. Our fund structure enables us to start off as senior lender and then subordinate to a senior once our clients find the right long-term senior lender.

Flexible Solutions

SaaS Funding has a unique structure whereby we do not require covenants in order to provide maximum flexibility. This covenant free capital is SaaS Funding’s special sauce that we allow to easily transition to a subordinated position.  A small equity stake in the form of warrants is generally required in return for flexible amortization and no covenants. The overall cost of capital is much less than equity.

Our Not So Strict Lending Guidelines

  • Post commercialization and Beta stage
  • Minimal recurring revenue of $200,000 per month
  • Monthly Cash burn below $100,000 per month with viable plan to achieve positive cash flow; special exceptions made for companies with rapid growth or other collateral support
  • Strong customer revenue retention rates
  • Diversified customer base
  • Loan Value <50% Enterprise Value

Sector Focus

  • SaaS
  • Application software
  • Healthcare IT
  • Data analytics
  • eCommerce
  • Tech enabled services
  • Security
  • Mobile

Value Creation

SaaS Funding oftentimes provides growth capital subsequent to Series A and Series B financing rounds, offering leverage on expensive equity.  Borrowers were able to add a year of performance history, extending their runway on raising equity and establishing meaningfully higher metrics and valuations.