This article is the sixth in a series providing an overview
of critical considerations for commercial lenders contemplating
whether to finance a tech company and how such loans can be
secured.
Software as a Service (SaaS) vendors provide services that are
based on the access to and the functionality of software centrally
hosted on external servers, rather than installed on the
customer's premises. While SaaS providers can seek financing
through either equity or debt, debt may be preferred to avoid
equity dilution and loss of control associated with financing
sources like venture capital funds.
Debt options typically available to SaaS providers include
factoring and a monthly recurring revenue line of credit.
