SaaS Financing: Venture Debt, ARR-Based Loans, and RBF
Venture debt used to be the only non-dilutive option for SaaS. Today there's venture debt, ARR-multiple loans, RBF, and credit-extended facilities — each priced for a different stage and growth rate.
ARR-based term loans
Lenders like CapchaseGrow, Pipe, and Founderpath advance 30–50% of trailing ARR against future revenue. 12–36 month terms. 1.1–1.3x repayment. No dilution, no warrants.
Venture debt
Available alongside a recent equity round. Typically 25–35% of last equity round size. Priced prime + 2–5% with warrants for 0.5–2% of FDS. Best as a runway extender between rounds.
Revenue-based financing
For sub-$3M ARR companies without strong VC backing. Higher cost (1.3–1.5x) but no covenants and faster underwriting. Trade speed for cost.
Credit lines against AR
For SaaS billing annually or multi-year — AR factoring on signed contracts. Lower cost than venture debt for high-ACV B2B SaaS.
Avoid
MCAs and short-duration daily-debit products. Daily cash flow doesn't match SaaS revenue patterns and pricing is punitive vs the alternatives now available.
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