Revenue Loans

A relatively new way to finance Start-Ups through revenue sharing.  Zero dilution and repayments that are pro-rata to revenues, but at the cost of stricter repayment terms, a strict amortisation schedule and a higher establishment fee.

Eligibility

You have revenues of at least £100,000 a month, and either a track record of receiving those revenues for 6 months, or contracts that total up to that amount and whose duration exceeds six months.

2

Purpose

The purpose of a growth loan is usually to either

- Finance the set-up costs of providing a contract, or

- Accelerate sales growth

There usually will be no significant covenants on the use of proceeds, but there will be strict covenants on monthly interest and capital repayments.  We will hold a fixed and floating charge over the business for the duration of the loan and will usually need to the senior-most lender.

3

Timing & Size

Growth Loans can be executed at any time.

Due diligence usually takes about a week from the time we have received all necessary information.

 

The loan is usually structured so your monthly payments (capital and interest) do not exceed 25% of your monthly revenues, and the loan term is usually between 6 months and 1.5 years.

4

Typical Terms

Establishment Fees: 5%-10%

Interest Rate: 10-15%

Warrant: None

Duration: 6m - 1.5 years, monthly amortising in-line with revenues

The exact terms will depend on the company's financial strength and duration of the loan (longer loans will tend to carry a higher interest rate).