Tag

MRR

2 insights

A grid of six months by two testing conventions. Tested on current month MRR, availability falls below the $3.8 million drawn in the last three months, producing deficiencies of $120,000, $340,000 and $376,000. Tested on a trailing six-month average, headroom stays positive at $150,000, $110,000 and $40,000.

The Multiple Works in Both Directions

A software company draws $3.8 million against a facility sized at five times MRR. One bad quarter cuts MRR 21 percent, and availability recalculates to $3.42 million, putting the limit $376,000 below the balance already drawn.
Financing StrategyBorrower Advisory
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A two-point range showing that a company at $500,000 of monthly recurring revenue can access $2.0 million at a four times multiple or $4.0 million at eight times, a $2.0 million spread on identical revenue.

Most Debt Is a Fixed Number. This One Is a Multiple of MRR.

A term loan is sized once and never changes. A committed facility against recurring revenue is sized as a multiple of monthly revenue, and availability rises as that revenue rises, without a second underwriting.
Financing StrategyBorrower Advisory
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