Located in Cleveland, Ohio, Proformex is a software company offering an advanced, streamlined life insurance servicing platform for advisors, agents, brokers, financial institutions, and more. Its platform allows users to consolidate their book of business, track policy performance based on client goals, proactively identify opportunities and risks, and ultimately better support clients’ best interests.
Proformex was looking to support its equity funding with a venture debt program while maintaining momentum and keeping the overall cost of capital down.
The company turned to River SaaS Capital — a current equity investor with whom it already had a strong relationship.
The Result: Thanks to their pre-existing relationship with River SaaS, Proformex was able to navigate the process quickly while receiving access to capital that was structured to support their growth goals.
As an early stage company, Proformex historically partnered with equity-based funding sources such as angel investors and early-stage investor firms, including River SaaS Capital. While previous experiences with early stage investing were time-intensive, required greater involvement, and carried high costs, Proformex and River SaaS enjoyed a strong equity relationship. Leadership quickly identified a growth opportunity, soon following up on their equity fundraising initiative with a venture debt program.
Proformex sought venture debt financing for two strategic purposes: first, the capital would be used to cover its monthly cash burn. Second, it was time to ramp up its growth engine on the enterprise side of its business.
Chief Financial Officer David Lowman had a wealth of experience with venture debt lenders, so this familiarity, in combination with the business having grown to a point where venture debt was accessible, led the Proformex leadership team to apply with River SaaS.
“It’s incredibly reassuring to see the RSC team spending time with us to truly understand what’s going on with our business.”
In many cases, venture debt lines typically transition into an equity relationship. But because River SaaS had already invested in Proformex and could support both sides of the relationship, the process was significantly easier.
“This was one of the best experiences I’ve seen a company have with a venture debt lender,” Lowman said. “RSC was already familiar with our team and our business, and they’d worked closely with our leadership team previously. It made for a smooth, seamless transition into the conversation about the debt line.”
One of the key advantages of venture debt at River SaaS is its sheer flexibility. A few distinct debt options are available depending on borrowers’ specific needs and growth goals, with funding ranging anywhere from $500,000 up to $5 million.
For this investment, Proformex sought a debt facility of $1 million with a longer interest-only repayment period of 36 months as opposed to the standard 12 to 18 months. Its strategy was to use that extended period to work toward its goals and increase cash flow in order to pay back the debt. The River SaaS team was happy to work with Proformex to structure the venture debt financing in this way.
Thanks to River SaaS’ earlier equity investment, the due diligence process for the debt line was simple and efficient. A notable differentiator and benefit for the Proformex team was that the company was not required to change its banking relationships in order to receive debt funding.
“Other debt lenders tend to be bank-owned and demand that deposit accounts are headquartered at their institutions. That wasn’t the case with RSC. It saved us the hassle of making any major changes.”
The closing process was simple as well thanks to straightforward documentation, requiring less involvement and review time from legal teams. With equity financing, this process can quickly cause funding times to extend several months or even longer — and lead to greater costs. But for Lowman and his team, the greatest benefit was the relationship between the two companies.
“It all goes back to having established such a strong working relationship with them. That emphasis made everything that much easier — from due diligence to negotiating terms and closing. We’ve been very pleased with the experience.”
After closing on its venture debt funding, Proformex put its capital to work implementing a sales initiative with a third-party B2B outbound lead generator. The company also hired a few key roles on its development team in order to further build out its enterprise pipeline. The company is continuing to grow and build on the momentum it’s seen since its most recent raise round.
The River SaaS team continues to partner with Proformex and support them along the way, meeting with the CEO monthly to maintain an open line of communication.
“It’s incredibly reassuring to see the RSC team spending time with us to truly understand what’s going on with our business. We feel that they truly understand us, and our open relationship has helped foster trust in each other to make this a meaningful, successful experience.”
Experience the River SaaS Capital Difference
With a more flexible debt financing solution than other providers, including tranche options and no warrants required, River SaaS Capital is the investor you’ve been looking for to achieve your goals. Connect with our team today to learn how we can help you leverage your momentum for greater success.