Revenue Based Financing Saas

Revenue based financing is perfect for saas businesses and other companies whose primary income is based on subscriptions.

Revenue based financing saas. Revenue based financing which helps tech entrepreneurs get to the next level without giving up equity board seats or personal guarantees at lighter capital we don t take equity or ask. As opposed to term loans with fixed monthly interest payments monthly payments are based on a percentage of monthly revenue. With this in mind exploring your saas company s finance options plays an important role in planning ahead and knowing where your revenue expenses and cash flow are going over time. A consistent high monthly recurring revenue mrr along with high gross margins combine to qualify a business for a royalty based loan.

Through their revenue analysis of your business they can calculate how much capital to offer you. They analyze the health of your recurring revenue to determine if you would be good fit for funding. Revenue based financing what it is. Revenue financing also known as revenue based financing is a type of growth capital provided by timia to a start up in exchange for a percentage of future revenue.

Our loan models are perfect for saas companies that want to expand or explore new markets without losing equity or control. Most finance lenders will evaluate your cost of capital and other revenue based factors to determine a plan that will not help you in the long run. Examples include oil wells pharmaceuticals and movies. You may have heard of revenue based financing rbf venture debt or hybrid structures blending a revenue or profit share concept with an equity ownership stake.

With payments that are tied to your revenue make more pay more our revenue based financing products are a good fit for inital scale saas companies that have less predictable or lumpy revenue cash flow typically enterprise saas. Over the last ten years rbf has entered mrr based bank facilities are generally only. They offer forms of debt financing such as term loans and or revenue based financing rbf that fit your cash flow dynamics. What is a term loan.

The most successful saas businesses are moving away from historical analysis to a more proactive forecast based approach. Revenue based financing for saas companies revenue based financing also known as royalty financing or revenue sharing is an alternative debt financing structure. New investment structures are gaining traction in the early stage saas financing market.