SaaS Capital

SaaS Capital sizes its loans entirely against monthly recurring revenue rather than equity raised or path to profitability. Its term sheets typically include warrants, no EBITDA-based covenants, and deferred principal amortization, meaning the repayment structure is designed to flex with the borrower's subscription growth. Traditional venture debt providers, in contrast, often require a recent equity round and impose P&L covenants that SaaS firms may breach while reinvesting in growth.

The firm issues senior secured loans from $1 million to $8 million, with the specific amount determined by a multiple of the borrower's annual recurring revenue. SaaS Capital's own guidance suggests it targets companies with at least $3 million in ARR, and the majority of its portfolio has been deployed into U.S.- and Canada-based businesses.

The firm typically takes warrants as part of its term loan structure, which provide an equity upside if the borrower performs, but it does not operate as a venture capital or growth equity investor. The primary return driver is the interest and fee income from its credit portfolio.

The SaaS Capital Index is a proprietary benchmark that tracks the enterprise value-to-revenue multiples of publicly traded SaaS companies. The firm publishes the index quarterly, and it has become a widely used reference point in both boardroom discussions and venture capital negotiations for private-company valuation context.

The firm relies on a proprietary underwriting model built on two decades of private SaaS revenue data, which forecasts cash consumption based on churn-adjusted recurring revenue, sales efficiency, and historical burn rates. By lending against the stability of the subscription base rather than current margins, the firm argues it can accurately price risk even for unprofitable companies with strong gross retention.