SaaS subscription financing

Written By Guest User

How It Works —

The financier will advance you cash based on the recurring customer payments that you receive monthly and quarterly. You receive the annual contract value upfront minus a discount. The agreement ends once the customer pays all of its payments for the year.

Example —

You receive $110K from the financier today based on $120k that you expect from your customer over the next 12 months. You provide the monthly payments to the financier until the customer pays a total of $120k.

You Might Be A Fit If —

  • You have a SaaS business model.
  • Your customers pay you monthly or quarterly.
  • You have found product-market fit.
  • You have predictable customer retention.

Why You Would Use This —

  • You can stop discounting your product to incentivize customers to pay you upfront. 

  • There is no complicated loan agreement and funding can happen quickly. 

  • You don’t have to advance every customer’s revenue, you can control how much funding you take on.

What TO WATCH OUT FOR —

  • If your customer stops paying for your solution, you are still responsible for paying the full contract value to the financier.

    • In many cases, you can simply provide another customer’s contract value to make up for the churned revenue and access more funding.

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