SaaS Financing: What you need to know to get started 

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Funding the scale of your software as a service (SaaS) business can be challenging. Banks often won’t loan to you as you don’t have tangible assets, and your financing options might feel limited to taking on bank debt, or giving up equity – both of which have restrictive terms. 

In your search for financing, you’ve probably experienced the following: 

  • You want to get your funding sorted as soon as possible: you don’t want to wait weeks for an answer.
  • You’re struggling to be accepted for traditional funding. Traditional funders typically don’t support SAAS business models.
  • You don’t want to commit to a multi-year term loan and want a more flexible, lower-commitment option. 
  • You don’t want to give a personal guarantee and put your home and personal assets at risk. 

This article will run you through your options for financing as a SaaS company. 

In this article: 

Are you an Irish SaaS business looking for business funding? Get in touch

What are the finance options for a SaaS company? 

Here’s an overview of the most popular forms of financing for a SaaS company:

Type of Funding Description Pros Cons Growth Stage
Bank loans Traditional term loan from banks No equity dilution
Clear repayment terms
Can have lower interest rates than alternative lending
Requires proof of profitability or collateral
Difficult to get accepted for as a SaaS business
Inflexible: you’re tied in for the length of the loan
Scaling (mature businesses)
Revenue based financing Financing tied to your future business projections No dilution of equity
Flexible repayment terms based on business performance
No long-term commitment
No personal guarantee (if using Financefair)
Can be more expensive than a traditional bank loan Early Growth to Scaling
Online business line of credit Works similarly to a digital overdraft Only pay for what you use
Revolving credit: once you pay off your borrowed amount, that funding is available again
No long-term commitment
No personal guarantee (if using Financefair)
Business banks usually require you to have a current account with them (unless you use a standalone lender like Financefair) Early stage to early growth
Venture Capital (VC) Investment from venture capitalist firms in exchange for equity Access to significant capital, mentorship, and networks Loss of equity
Often high expectations for growth
Highly competitive process to get funding
Early growth to scaling
Angel investment Investment from high-net-worth individuals More flexible terms than VC
Access to investors’ expertise and network
Equity dilution
Smaller amounts of capital compared to VC
Seed to early stage SaaS startups
Crowdfunding Raising small amounts of money from a large number of people, typically via online platforms Access to capital without giving up equity (if reward-based) Requires significant marketing effort
Not suitable for large funding needs
Lack of consistent funding
Can give up equity (equity crowdfunding)
Seed to early stage SaaS startups

As a provider of revenue based finance and line of credit, we’re going to go into detail about each option, so you can decide whether they’re right for your SaaS business. 

It’s worth noting that both revenue based finance and line of credit can be used in tandem with other finance options – like a bank loan, VC, or even crowdfunding. 

Prefer to talk to us right away to find out how RBF and LOC can help your business grow? Get in touch.

Revenue based financing: capital that grows with you

Revenue based finance gives you access to working capital that’s directly connected to the  revenue growth of your business. This allows you to grow your company independently leveraging off your future revenue from existing contracts, eliminating the need for long-term debt or an over-reliance on equity financing. 

Because we’re writing this article, we’ll run you through how revenue based financing works at Financefair. It might work slightly differently depending on the lender you use.  

If you’re an Irish business that meets the following criteria, you’re eligible for revenue based finance with us:

  • Limited company in Ireland with at least 2 directors
  • Trading for at least 1 year
  • Minimum turnover of €300k

Our process involves examining your forecasted revenue over the coming year alongside your anticipated growth trajectory.  When you apply for revenue based finance, we’ll start by evaluating your business’s cash flow forecasts for the upcoming 12 months. This helps us determine your maximum funding requirement—the largest amount of capital you anticipate needing within this timeframe.

We can offer you a maximum of 20% of your ARR or 70% of your quarterly revenue. These funds can be disbursed either quarterly or monthly, with adjustments made according to your growth projections.

Because we base the size of your facility on your company’s revenue, you can unlock higher funding amounts as your revenue grows. 

We’ll work with you to make sure that you have enough capital to manage any shortfalls in cash flow. Once we have all the information we need, we’ll calculate and confirm the total approved amount we can offer you.

For instance, we might authorise a credit line of €500,000 for the year, initially releasing €200,000, with subsequent disbursements timed to address provide capital injections at key growth periods where cashflow is maximised. This setup allows you to move forward over the next several months with confidence that you have secure funds available to handle a cash flow pinch. 

You can learn more about how it works in our revenue based financing guide

What happens if your revenue decreases? 

If your projected revenue increases (or decreases), the amount of funds you can access will change. However, we won’t just cut off your facility.

As a fintech company, we can use our advanced data analytics to quickly check how your company is performing, eliminating the need for constant updates on your financial standings. This means we can be proactive about reaching out to discuss potential changes in funding for the upcoming quarter based on your projected revenue.

How much does revenue based financing cost?

The terms and pricing for your revenue-based financing are established at the start of a 12-month arrangement. 

Your fee is based on:

  • Your company
  • Your company’s experience
  • Average debtor days
  • Average debtor book
  • Turnover
  • Funding limit
  • Credit score

Our fees are straightforward

  • Platform fee: This works like a joining fee. If you renew your facility after 1 year, the renewal fee will be 50% of the initial platform fee. 
  • Monthly facility fee: This is a fixed fee charged on the facility limit we provide.. 
  • Discount charge: The higher your credit score, the higher a discount we can offer on your agreed pricing.

You can pay for your financing in two different ways: 

  • Per 30 days
  • As a percentage of the cost of funding

Here’s what it might cost your SaaS business: 

Annual Recurring Revenue Including VAT Estimated Amount of Funding We Can Advance Estimated Cost per 30 Days
€500,000 €100,000 €1,500
€750,000 €150,000 €2,250
€1,000,000 €200,000 €3,000

Actual costs will vary, depending on your business.

Try the calculator for yourself on our revenue based financing page. 

The benefits of revenue based financing

  • You’ll get a line of funding that’s directly related to the growth of your business. This reduces the chance of under or overborrowing, and your funding will scale up as your business grows. 
  • It’s flexible and not a long-term commitment. Unlike with a term loan, you’re not tied into a multiple-year agreement with revenue based financing. 
  • No need for additional applications: If you find that you need a higher level of funding to make the most of growth opportunities, there’s no need to fill in another application form. Just reach out to us
  • It’s relatively low risk, which means we can keep security to a minimum. Because the money is only out for 90 days at a time, the risk is moderate. This reduces the security documentation you need to complete when you apply. 
  • If you’re planning on bootstrapping, revenue based finance is a great working capital solution that doesn’t require giving away equity. However, it also works well alongside other forms of investments, such as venture capital or angel investors. If you decide to go after Series A funding in the future, a higher ARR can help increase your company valuation.

You can find out more in our revenue based financing guide

Line of credit: funding you can tap into when you need it

If your business isn’t quite ready for revenue based financing, or you just want to finance a smaller amount, a business line of credit is a great option for a SaaS company. 

A business line of credit functions like a digital overdraft facility, that you can tap into whenever you need it. You’ll only pay for what you use. 

Line of credit is best for SaaS businesses who need access to around €10,000 to €250,000 annually. 

Here’s the eligibility for a line of credit facility with Financefair: 

  • Incorporated limited company in Ireland
  • Trading for at least 1 year
  • Minimum annual turnover of €250,000

As a SaaS business, you’ve probably found that there are certain points of the quarter where you experience a cash flow dip. Or perhaps you want the ability to make the most of growth opportunities, without worrying if you have the capital to do so.

With a business line of credit, you have quick access to a source of working capital. You can initiate a transfer through our online platform, and receive funds in 24 hours. 

This is a far more flexible and efficient option than more traditional funding, like a term-loan, where you have to lock in for a certain amount of time. Likewise, this is a revolving line of credit – once you pay the funds off, you can access them again. 

Many banks offer a business line of credit, but you usually need to have a current account with them, and have had your account open for a certain amount of time.

Financefair is the only provider of a standalone business line of credit in Ireland. 

Our pricing is transparent: costs typically range from 0.75% to 1.50% per 30 days, depending on your business.

You’ll pay:

  • A monthly fee of 0.6-0.75% 
  • The platform joining fee 
  • Depending on your credit rating, there may be a discount applied

The benefits of business line of credit

  • Allows you to fund milestone needs in the business. Perhaps you need to upgrade expensive equipment as your operations expand, or work on product development for your software. A line of credit facility gives you the funds to do so.
  • SaaS funding that you can access quickly to make the most of a growth opportunity. Perhaps you have the chance to tender for a big client, but want to make sure you have the upfront capital to deliver. You can tap into your line of credit funding and get paid within 24 hours.
  • It’s flexible, and you only pay for what you use. With a business line of credit, you’re not stuck in a long-term financial commitment. We won’t charge you if you don’t use it.
  • No equity dilution, and no personal guarantees. We won’t take any equity in your business, and we won’t ask for a personal guarantee – so you’re not putting your personal assets at risk. 

A business line of credit gives you the peace of mind that you have the funds there if you need them.

Interested in a business line of credit? Apply today in 5 minutes

Why choose Financefair for your SaaS financing? 

You might be interested in revenue based financing and line of credit for your SaaS company: but why should you choose Financefair?

Here are a few reasons:

Get more funding sooner, thanks to our innovative business model

Thanks to our unique business model, we’re able to advance a larger amount of funds to business without tangible assets – like SaaS companies. 

That’s because unlike banks, we don’t fund directly from our balance sheet. We partner with enthusiastic investors who understand SaaS businesses, and can advance the funding you need to grow. This means you might get 20% from one, 50% from another, and so on. This diversification enables you to get more funding than you would with a traditional lender. 

You have more flexibility to choose multiple types of financing 

Both revenue based financing and line of credit are far more flexible than a bank loan. You’re not left waiting until your term-loan ends before you can apply for a higher amount of funding. 

And when you sign up to Financefair, it’s simple to move from one funding facility to another. 

For example, you might be an early stage SaaS business who is best suited to an online line of credit in the short-term. However, your business plans works as planned and your monthly revenue is increasing – soon, the funding level of a line of credit might not be enough. In that case, you can easily switch to a more appropriate financing solution, like revenue based finance.

Once you’re on-boarded, our experts are always on-hand to discuss your facility, and move you to a different one if it will suit your business better. 

Get an indicative offer within 24 hours

It can be frustrating waiting to find out how much financing you can receive from a lender. You can spend weeks waiting, just to find out the amount you can borrow is too low. 

At Financefair, we can give you an indicative offer in one business day. And when you’re onboarded on our platform and we have all your documentation, you can access funds within 24 hours.

We’re able to do this because of our platform and our use of data analytics. We’ll have access to real time account data metrics, and can make a decision quickly, reducing friction and admin time. We’ll also regularly check-in to discuss your business, and discuss how we can change your facility – based on your needs.  

Our team has decades of experience in financial services, and we can help guide you to the best solution for your SaaS business. 

Other benefits of using Financefair include:

  • None of our funding options require you to give up equity in your business. 
  • We’re the only provider of revenue based financing and standalone business line of credit in ireland. 
  • You don’t need a personal guarantee. There’s no need to put your home and personal assets at risk to grow your business. 
  • You won’t be charged any hidden annual fees or costs. Our pricing and monthly payments are clear from the outset. 

Interested in Financefair but not sure where to start? Reach out to our friendly team, who can help find the best solution for your business.

How a SaaS company used revenue based financing to grow their business and retain equity

A company specialising in retrofitting fleet vehicles with dash cameras for enhanced security and providing software for data collection approached us for financial guidance.

Their technology bolstered security and gathered valuable data for businesses and the insurance sector.

Despite their innovative service they found themselves in a financial dilemma when it came time to scale.

Eager to secure €4 million in additional funding to penetrate new markets and solidify their vision, they were reluctant to dilute their ownership by parting with more equity.

Understanding their predicament, we proposed a solution tailored to their growth objectives without the need for equity sacrifice: revenue based financing. This flexible financing model aligned perfectly with their working capital financing strategy, allowing them to leverage their incoming revenue for growth capital.

We extended to them a €1.5 million revolving funding line, which we disbursed in stages, calibrated closely with their business forecasts. This strategic funding approach provided them with the immediate capital required to forge ahead, while also granting them the flexibility to manage their finances more effectively.

Thanks to this arrangement, the company was able to postpone its search for investment funding by approximately 12 months. This crucial period of financial breathing space enabled them to not only refine their funding strategy but also to significantly reduce the amount of additional investment needed. As a result, they successfully preserved a larger share of their business ownership, positioning themselves more favourably for future growth and success.

Choose Financefair for your SaaS financing 

Without tangible assets, it can be a challenge to get a level of funding you’re satisfied with from a traditional lender. 

However, with facilities like revenue based finance and business line of credit from Financefair, you can secure the funding and support you need to grow your business – without diluting equity.

If you’re a SaaS business in Ireland that meets our eligibility and is looking for non-dilutive financing, apply today, and let’s discuss how Financefair can grow your business. 

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