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Knowledge center

How debt financing works

Two frameworks and eight plain-English product guides: where each product sits, what it costs, and when to use it.

The credit landscape

The right product depends on stage

As cashflow turns positive and revenue scales, the market widens: venture debt at the earliest stage through to corporate finance at $1bn+ enterprise value.

Most mature

Corporate Finance

Mature, cash-flowing

 

Unitranche & Buyout

Profitable, cash-generative

 

Mezzanine

Stable EV, exit in sight

 

Growth Debt + Credit Lines

Established revenues

Earliest stage

Venture Debt

Loss-making, VC-backed

Structure vs price

The trade-off behind every debt product

More structure and collateral, cheaper capital. Choosing a product is choosing where on this spectrum the business can credibly sit.

Highest cost

No structure, no collateral

Maximum flexibility: no covenants and nothing pledged beyond an all-asset charge.

Mid cost

Some structure and/or collateral

Covenants, or assets like receivables and deferred revenue, bring the price down.

Lowest cost

High structure and/or collateral

Full covenant packages and strong collateral or cashflows earn the cheapest capital.

Indicative positioning only. Pricing and structure depend on the company, the assets, and the market, and are subject to further diligence.

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