The Company: Southeast based consumer credit and identity solutions software-as-a-service provider, majority owned by founder & CEO Ed Margolin. Visit Fraud Protection Network’s website to learn more.
The Financing Situation: The Company had previously financed its growth with a combination of equity and convertible notes. With new product rollouts and strategic partnerships in 2020 creating accelerated growth, the Company was seeking non-dilutive capital to finance its working capital needs and extinguish convertible notes in order to preserve equity.
The Solution: SG was able to quickly get comfortable with the transaction due to the rapidly growing monthly recurring revenue, strong industry retention rates, and overall financial health of the company. SG structured a covenant-lite $2.5MM loan with a tailored repayment schedule around cash flow that bought out the convertible notes to avoid further dilution and provided additional liquidity for the Company to continue its growth trajectory without equity support.
This transaction demonstrates SG’s ability to underwrite SaaS / recurring revenue loans. While many of you know us as a cash flow based lender, we now provide non-dilutive SaaS / recurring revenue loans requiring creativity, flexibility, and speed to close. Click HERE for a link to our SaaS / recurring revenue one pager to learn more.