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SaaS

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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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Two stacked bars of available liquidity. The annual biller holds $4.5 million of cash and is offered a $2.5 million facility, $7.0 million in total, of which $5.0 million is service already paid for and still owed. The monthly biller holds $1.2 million of cash and is offered $4.8 million, $6.0 million in total, of which $400,000 is owed.

Annual Billing Made You Cash-Rich. It Also Halved Your Facility.

Two software companies have identical ARR and retention. One bills annually in advance and holds $4.5 million of cash. The other bills monthly. The monthly biller is offered $4.8 million of debt against the annual biller's $2.5 million.
Financing StrategyBorrower Advisory
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A grid of 100 squares, each worth $100,000 of a software company's $10 million ARR. Seventy squares are other customers and count toward borrowing. Thirty belong to the largest customer: twenty count and ten, the excess above a 20 percent concentration cap, do not.

Your Biggest Customer Grew. Your Borrowing Capacity Did Not.

A $10 million ARR software company adds $2 million of new ARR. From its largest customer, that lifts borrowing capacity by $240,000. From two new customers, the same ARR lifts it by $1.44 million, six times as much.
Financing StrategyBorrower Advisory
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