What are the Loan Options for SaaS Companies?
As a SaaS company that needs capital to expand, we know that most options for obtaining debt capital are not favorable to your business model. Bank loans and venture capital are viable options, but these financing models have significant drawbacks.
That’s where RevTek Capital comes in. If you want to grow your SaaS company without losing control of your company or equity, you need RevTek Capital's debt financing. 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. RevTek Capital provides revenue-based financing designed specifically for businesses that are in the early stages of development. In other words, we agree to a percentage of future revenue in exchange for capital.
We provide up to $2,000,000 in growth capital, which you can use in areas such as software development, sales and marketing, equipment, and product development. Our terms are simple, and our process is quick and easy.
Here is a chart to show the benefits and drawbacks of different options for obtaining SaaS capital.
Benefit: Relatively cheap interest rate
Con: No interest in working with early stage companies
Con: Must be currently profitable
Benefit: A venture capital firm can provide consultation to a new startup
Benefit: Works with smaller companies
Con: Very high interest rates
Con: Strips some of the control of the business from the founders
Benefit: Available for smaller companies that are not profitable
Benefit: No covenants or warrants
Con: Extremely high interest rates
Con: Expensive up-front payments
Benefit: Lowest interest rates available
Benefit: Founders maintain control
Benefit: Revenue is collateral cash
Benefit: Affordable monthly payments
More flexible than the bank
We lend more to early-stage growth companies
Interest rates can be lower for bank loans than for revenue-based financing, but beyond small lines of credit, banks rarely lend enough for early-stage growth.
Bank loans contain complex covenants that can be difficult to navigate.
Monthly payments rise and fall with the ebb and flow of your revenue
Your monthly payments
Revenue loan rate
Monthly net cash receipts
Payments adjust to what your business can afford.
The payment rate is always below 10% to minimize the impact on your cash flow.
How fast you repay your loan depends on how fast your business grows
Our loans are normally repaid over 3–5 years, but if your revenue grows faster than planned, you can pay off the loan sooner.
Banks, on the other hand, can make it very difficult or expensive to terminate a loan early.
Far cheaper than equity
Our revenue-based financing uses a simple, transparent pricing model so you know your total commitment from day one
Revenue-based financing has two costs:
A repayment cap,
Minimal legal expenses (usually around $3,500),
The repayment cap is calculated as follows:
Cost of funds
The cap is usually 1.3–1.8x the amount borrowed, paid back over the length of the loan (usually 3–5 years).
Venture capital is not free—in fact it is vastly more expensive in the long run.
The equivalent “payment cap” for venture capital can be 10–20x the amount they invest in you—or more.
And initial legal fees and expenses can easily reach $30,000.
Funded More than 27 Growing Technology Entrepreneurs
As an intermediary, I have had the opportunity of working with the Principals regarding the financing needs of operating companies which I represent. They are very proficient at, being able to "Peel the Onion Back" in analyzing a particular financing need to come up with solutions that would meet the needs of my clients seeking financing. With it being a flat organization, you are always talking directly with the decision makers who are very responsive in their communication of: How to get to a deal or we do not see this fitting into our lending model.
Thunderbird Corporate Finance, LLC
RevTek Capital has evolved into more than a financial partner for our company. While their financial acumen is evident early on, the long term benefit RevTek Capital offers is the ability to dig into the operations side of your business and offer a fresh perspective or a new connection that can further your business. If you're getting started and want a big value add to your financing, RevTek Capital is an excellent choice.
WISPer Ventures / REVTEK Capital went to bat for us early on and has proven to be a great financial partner throughout our record historical growth. They went the extra mile to really understand our business early on, when other lenders simply wouldn’t.
In addition, they have proven to be much more than a direct financing source by helping us raise additional capital from outside sources to further accelerate our growth.
If you are an early stage company seeking growth capital with an objective to minimize dilution, WISPer/REVTEK is the perfect choice.
If you are looking to expand, restructure, or explore alternative options with your SaaS business, RevTek Capital can help you reach your goals.
Our track record proves our capability of aiding SaaS companies and allowing their revenue to grow. Contact us today to learn more about how we can help your SaaS business grow.