Senior

SG Credit Profile: Technology (SaaS)

The Company: A bootstrapped communications SaaS platform catering to the insurance industry.

The Financing Situation: An entrepreneur with extensive insurance industry experience had an executed LOI to acquire the Company. The sellers wanted a quick exit process so provided a four (4) week timeframe to consummate the transaction. The acquisition was structured with a combination of equity and SG debt.

The Solution: SG was supportive of the transaction given the Company’s diverse ARR base, mission critical product, profitability, and the contemporaneous equity contribution. SG structured a $4.5MM senior secured debt facility providing interest-only flexibility to support the Company’s planned ARR growth initiatives. SG was able to move quickly to meet the tight closing timeframe and the acquisition was completed as planned.

SG Credit Profile: SaaS

The Company: A leader in cloud adoption and management solutions. 

The Financing Situation: The Company was seeking non-dilutive growth capital to execute on its substantial pipeline. 

The Solution: SG was supportive of the deal due to the Company’s recurring revenue metrics, high retention rates, positive growth tailwinds, and strength of the management team. 

To learn more, please click here to view the full press release. 

SG Credit Profile: SaaS

The Company: A leader in channel management automation for enterprises selling through channel partners.

The Financing Situation: The Company was seeking capital for product development, to expand its team, and to execute on growth opportunities in its pipeline.

The Solution: SG structured a $1.5 million non-dilutive term loan supported by the Company’s recurring revenue base. SG was able to get comfortable based on the Company’s comprehensive product suite, ARR growth, strong SaaS metrics, and experienced management team.

SG Credit Profile: High Net Worth

The Company: A single-asset real estate holding company owned by a high net worth technology executive (“the Guarantor”).

The Financing Situation: The Guarantor agreed to acquire a lakefront residential land parcel in an emerging city. Although the Guarantor had the asset base to fund the purchase with equity, much of his net worth was tied up in fully vested stock options that had punitive tax consequences upon conversion. Additionally, the seller was fatigued and wanted to close in less than three (3) weeks, meaning conventional bank financing was not a viable option.

The Solution: SG underwrote the real estate as well as the outside personal assets of the Guarantor. Given the location and liquidity of the underlying real estate collateral, coupled with the strength of the Guarantor’s personal balance sheet, SG was comfortable providing a high LTV loan. SG moved quickly to meet the timing constraints and closed within three (3) weeks from executed term sheet.

This transaction underscores SG’s ability and willingness to structure and underwrite collateral based / guarantor-based loans. While many of you know us as a cash flow or technology (SaaS) lender, we now provide special situation (balance sheet) loans requiring creativity, flexibility, and speed to close. We also have a strong interest in providing customized solutions for liquidity constrained high net worth entrepreneurs. 

SG Credit Profile: SaaS

The Company: A cybersecurity software company providing best in class security operations, compliance, and consulting services.

The Financing Situation: The Company was seeking non-dilutive growth capital to expand its cloud-based cybersecurity platform and customer reach.

The Solution: SG was able to get comfortable with the transaction due to the Company’s recurring revenue metrics, strong retention rates, management depth, and ongoing support from key investors.

To learn more, please click here to view the full press release.

SG Credit Profile: SaaS

The Target: Corporate travel and entertainment software, data integration, and business intelligence (BI) provider for large enterprises and travel management companies.

The Buyer: Enterprise software operating company backed by private equity.

The Financing Situation: The Buyer was seeking a debt facility to supplement the equity contribution made to purchase the Target.

The Solution: SG structured a $4 million term loan to support the closing of the acquisition. SG was able to get comfortable based on the Company’s recurring revenue, strong SaaS metrics, experienced management team, and the strength of the Buyer.

SG Credit Profile: SaaS

The Company: Provider of procurement and spend management software to mid-market businesses.

The Financing Situation: The Company had legacy bank debt from a previous acquisition that was underwritten primarily by cash flow, not recurring revenue. The Company’s growth plan called for re-investing all excess cash flow into growth, which conflicted with the profitability-based covenants of its existing credit facility. The existing bank lender was unable to re-underwrite its loan based on recurring revenue so sought to exit the loan at maturity. The Company needed an experienced tech lending partner who better understood its SaaS business model and could scale with the Company as it executed on its growth objectives.

The Solution: SG structured a $2.75 million term loan to pay off the Company’s existing lender and provide additional liquidity to support its continued growth plan. SG was able to get comfortable based on the Company’s recurring revenue, strong SaaS metrics, and experienced management team.

SG Credit Profile: Cash Flow

The Company: A family-office backed provider of mental and behavioral health services catering to Medicaid patients.

The Financing Situation: The Company was experiencing high growth due to a combination of strong demand and positive regulatory tailwinds. To capitalize on this growth, the Company sought a non-dilutive debt facility to fund expansion opportunities requiring hard upfront costs.

The Solution: SG was able to underwrite the history of profitability, variable cost nature of the business, and positive growth trends. SG structured a $5.0 million credit facility to provide the Company with the immediate capital it needed to open new locations in its pipeline as well as a delayed draw component to scale with the Company.

SG Credit Profile: Cash Flow

The Company: An entrepreneur-owned specialty delivery service catering primarily to the medical industry.

The Financing Situation: The founder of the Company needed growth capital to fund an emerging but unrelated new venture. The founder had previously signed an LOI with another lender that re-traded key deal terms during diligence. Faced with immediate time constraints, the founder needed a new debt provider that could execute quickly and provide certainty to close.

The Solution: Although the new venture on its own could not yet support a debt facility, SG was able to mitigate this by underwriting the cash flows of the Company. Given the Company’s positive growth trend, diverse customer base, and historical cash flow, SG was able to provide substantial covenant flexibility and permitted growth capital advances to fund the new venture. SG closed within three (3) weeks of signed term sheet.

SG Credit Profile: Technology (SaaS)

The Company: A leading online invitation and digital greeting card subscription platform.

The Financing Situation: The Company was seeking non-dilutive growth capital to acquire VidHug, an easy-to-use video platform that enables you to request, collect, and combine videos to create a personalized and meaningful montage for celebrations and holidays.

The Solution: SG was able to get comfortable with the transaction due to the Company’s committed management team, consistent financial performance, recurring revenue metrics, and overall industry trends. SG’s solution allowed the Company to complete an accretive acquisition without dilution and Punchbowl leveraged the acquired platform to launch Memento.com. The Company now offers a comprehensive technology platform for celebrations, holidays, and meaningful life memories.

To learn more, please click here to view the full press release.

For more information about this announcement, please contact Kristen Elworthy at Seven Hills Communications (punchbowl@sevenhillscommunications.com).