Traditional lenders like banks tend to shy away from lending to Software as a Service (SaaS) companies because they don’t have the tangible assets and positive free cash flow that lenders normally require. But we find the SaaS business model appealing for its predictability — specifically, the monthly recurring revenue (MRR) they draw from clients that subscribe to their services.
For that reason, Saratoga Investment Corp. offers a range of SaaS loans and SaaS financing opportunities for businesses looking to grow their operations.
Saratoga Investment Corp. is a publicly traded (NYSE: SAR) business development company (BDC) providing customized financing solutions for middle market companies located in the United States. Our investment professionals have a combined 80+ years of experience investing over $4 billion in middle market businesses.
Financing we offer:
- Leveraged & Management Buyouts
- Recapitalizations
- Growth Financings
- Acquisition Financings
- Transitional Financings
We work with SaaS businesses in the following industries:
- Education
- Finance
- Healthcare
- Hospitality
- Media & Telecommunications
- Specialty Chemical
The key quantitative metrics we consider when engaging in SaaS financing are MRR, customer acquisition and customer churn rate. We also typically work with businesses with revenues of $8 million to $250 million, EBITDA of $2 million or greater, and stable historical performance.
Qualitatively, we prefer to work with exceptional management teams running businesses with a leading market position or sustainable competitive advantages, especially with growth prospects in healthy end markets.
For more information about our SaaS financing opportunities, contact Rich Petrocelli or Marissa Mann.
The importance of SaaS financing
Growth is everything for SaaS companies. They must evolve to remain competitive in an ever-changing landscape — and we offer the sort of flexible SaaS financing solutions that enable these companies to meet their growth initiatives.
We take a solutions-oriented approach to investing, creating capital structures that work for all stakeholders. We prioritize quick feedback and creative transaction structures that don’t require business owners to cede managerial control.
Saratoga offers a broad range of financing solutions for our partners, including subordinated debt, first and second lien loans, one‐stop and unitranche structures and equity co‐investments.
To see if you qualify for a SaaS loan, contact Rich Petrocelli or Marissa Mann.