TECH STARTUP FINANCING

Possibly, but it’s difficult for a startup to secure traditional bank funding, particularly if the business is a SaaS or technology startup that doesn't have hard assets. The application/approval process can drag on while the bank reviews your business plan, financials, your business’s credit as well as your personal credit, assets for collateral, and more.

Some entrepreneurs think they should avoid debt at all costs, but loans can be a great way to fund your startup’s runway. In the long run, debt is almost always cheaper than equity financing — plus you keep control of your business. When the loan is structured to align with your startup’s business model and growth goals, you can repay it without burning all your cash.

Only about five in 10,000 startups successfully raise venture capital, which shouldn’t deter you from going for gold when the time and conditions are right. Still, you don’t want to waste time pitching to investors when you can get non-dilutive growth capital with favorable terms to fund your runway and preserve your ownership value. 

Getting a loan from Lighter Capital for your SaaS startup is quick and easy. You’ll complete our short, secure online application with information about your business and revenue. Your startup should have at least $200,000 in annual recurring revenue (ARR) from a diversified customer base. (Important: You don’t have to be profitable.) Also, your business operations should be based in the U.S., Canada, or Australia. If it looks like a good fit, our Investment Team will connect with you to identify the best startup loan to help you reach your goals.

Bank and SBA loan requirements are often prohibitive for new SaaS businesses; they might require your business to be profitable or have as much cash on hand as you’re borrowing, for example. They also typically require a detailed business plan, financial history, financial projections, good personal credit history, a down payment, and assets and/or collateral to secure the loan. 

Startup business loan amounts vary greatly — not only from lender to lender, but also depending on your startup and its qualifications. An SBA microloan has a maximum amount of $50,000, for example, while other types of lenders might let you borrow millions. 

From Lighter Capital, you could get up to $4 million in upfront cash, plus additional tranches as your business grows. We right-size your initial loan amount to support your startup’s immediate needs, then scale your financing with you through additional funding rounds. Whether you’re a first-time founder or a serial entrepreneur, this approach makes it easier for you to manage your runway and cash flow and cultivate a healthy, sustainable business.

To see what you may qualify for, complete an application in under 2 minutes.

Not all debt is created equal, and startups can end up with a loan that costs a lot more than they had originally expected if they're not careful. 

For example, simply comparing APRs and the total cost of capital can create a fiscal mirage. You could end up with seemingly attractive financing that will eat up your working capital within six months. An alternative debt financing solution may look costlier from its term sheet, but when deployed, will help smooth out your cash flow so you can sustain long-term growth and achieve profitability. 

Additionally, origination fees, money down, collateral, personal guarantees, and penalty-heavy covenants that are common with most traditional bank loans can add significant — but largely avoidable — costs. 

Learn more in our free Guide to Debt Financing for SaaS Startups.