Venture Debt Financing Options

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Responding to the demands of growth.

Software-as-a-Service (SaaS) companies with monthly and annual subscription fees have great long-term potential, but their model also creates significant cash flow challenges. SaaS businesses incur expenses today to make sales that translate into revenue in the future. This can create a real cash crunch. That’s where River SaaS Capital comes in.

Traditional banks resist lending to SaaS businesses because they often lack the required collateral assets or balance sheets. Equity financing is an option, but high-margin SaaS companies may be reluctant to give up large percentages of ownership to investors. Our lending options hit the sweet spot, providing a way to grow aggressively without giving up equity.

A recent survey of SaaS companies with annual revenue under $5M found that 27% are using some form of debt financing.

Funding Solutions

How we help

With flexible funding solutions and a partnership approach, River SaaS Capital (RSC) lends on terms that are agreeable to you, without taking an ownership position in your business. We often fund companies who are earlier in their growth cycle than our counterparts and we also back companies that lack institutional venture capital sponsorship.

Who we finance

RSC lends to borrowers with a minimum of $150,000 in Monthly Recurring Revenue or $1.5 million in Annual Recurring Revenue and customer retention rates at or above 90%. Current profitability is not required.

How it works

RSC lends between $500,000 – $3 million to qualified companies who complete our efficient due diligence process. Funds are structured as 24 or 36-month term loans with principal and interest paid monthly via ACH. Additionally, RSC offers payment alternatives to reduce interest rates, including revenue sharing on post-investment earnings.

Find out if Debt Financing is
right for you.

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Lending Quick Facts

Revenue requirements

  • Minimum $1.5M ARR or $150K MRR.
  • Customer concentration cannot exceed 10% • of revenue.
  • Subscription model with stable revenues and ≥ 90% customer retention rates.

Profitability requirements

  • Gross margins ~70%+.
  • Ability to achieve profitability by reducing sales and marketing investment.

Investment & Security Details

  • $500K – $3M, with a first security interest on all assets, including intellectual property.
  • ACH, view access rights to borrower’s accounts, and board observation rights.
  • Financial covenants and/or operational covenants.

Credit facility

  • 24 or 36-month Term loans.
  • Can be structured as interest only for defined periods.
  • No additional equity features or hidden fees.
  • Options to reduce interest rates through post investment revenue sharing.

Advantages of venture debt

Flexible Funding
Solutions

Borrowers can draw from their loan quarterly to help them adapt to their changing capital needs.

Easy Application

Process

Our application process is designed to grant access to capital faster than other lending options.

Limited Financial
Risk

Our repayment terms scale to the financial growth of your company.

No Exit Strategy

Required

River SaaS Capital does not require a strategy for your SaaS company to be acquired in order to qualify for capital.

No Ownership
Dilution

River SaaS Capital lends on terms that are agreeable and does not take an ownership position in your company.

Re-borrow Against
Principal

Our flexible lending allows clients to re- borrow paid principal, offering a truly flexible form of financing.

At River SaaS Capital, our goal is to help our clients grow. Cash is only one piece of the puzzle. Our team has years of experience in business development, operations and management of successful businesses – experience we bring to bear with each one of our SaaS clients.

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“We have a long-standing relationship with the principals of River SaaS Capital and they understand our business and growth objectives wholly. They are not just capital providers, but our business partners who deliver flexible funding strategies and operational expertise.”

Brian Smith CEO, Banyan Technologies