Growth Debt
Growth debt (or a growth loan) is a term loan for high-growth companies with established revenues, typically $5M+ and Series B or beyond, that could drive to breakeven if needed. It funds expansion at a lower cost than venture debt, in exchange for a light covenant package.
Growth debt sits between venture debt and traditional cashflow lending. Because the business has real revenue and a path to profitability, lenders accept more structure (1-2 covenants) in exchange for better pricing. It is often combined with a working capital credit facility to cover the full financing need.
Indicative ticket
$10M-$100M
- Quantum
- Typically 1-1.2× gross profit
- Repayment
- Draw period, then interest-only period, then monthly principal + interest over 33-36 months
- Covenants
- 1-2 covenants: P&L and/or balance sheet tests
- Security
- Senior secured over all assets
- Pricing
- Arrangement fee, interest, early repayment and/or backend fee; sometimes warrants
Indicative only and subject to diligence. Actual terms depend on your business and the market.
Business profile
Who growth debt is for
- $5M+ revenues, likely Series B or beyond
- High growth with established revenues
- Can drive to breakeven if needed
- May or may not require additional equity
Debt purpose
What the capital is for
- Growth capital
- Liquidity buffer
- Expedite growth and hiring
- Geographic expansion
Benefits
Why borrowers choose it
- Less expensive than venture debt
- Increased structure (covenants) reduces the price
- Can be combined with a working capital credit facility
- Funds expansion with minimal dilution
When not to use it
An honest word of caution
- !Volatile or early-stage businesses
- !If the company won't comfortably support covenants
How it compares
Versus venture debt, growth debt is larger and cheaper, underwritten on revenue quality rather than investor backing, with covenants in exchange for the better price. Versus unitranche, it does not require positive EBITDA.
Terms, criteria, and sizing shown are indicative, not exhaustive, and subject to further diligence on the company and its assets.
Growth Debt FAQ
The questions founders and finance teams ask us most.
Still have questions? Talk to usGrowth debt is a term loan for fast-growing companies with established revenues, typically $5M+, that could reach breakeven if needed. It funds expansion at a lower cost than venture debt, with a light covenant package in exchange.
Related products
All guidesCashflow financing
Venture Debt
Non-dilutive runway for VC-backed companies, alongside or after a round.
Learn moreCashflow financing
Unitranche & Buyout Finance
A single blended facility for profitable companies, buyouts, and acquisitions.
Learn moreAsset-backed financing
Asset-Backed Lending
Revolving lines against receivables, inventory, MRR, or equipment.
Learn moreCurious what growth debt could look like for you?
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