Technology
Technology Business Loans
Technology companies fund hiring, product development and go-to-market spend without giving up equity. Recurring subscription revenue underwrites well, and funding arrives in days rather than the months a raise takes.
For technology
What it pays for
- Hiring engineers and sales staff
- Product development ahead of revenue
- Go-to-market and customer acquisition
- Infrastructure and tooling
- Bridging to a funding round
- Won't affect your credit
- Free, no obligation
- Up to $500K
Why the bank said no
It is usually the same reason a lender says yes.
Software businesses are asset-light and often unprofitable by design, which fails a bank's model outright. Recurring subscription revenue, though, is some of the most predictable income a lender can underwrite.
Why do banks turn down technology companies for loans? →Funding options
Funding options for technology.
The right product depends on what the money is for. One application here goes to the lenders in our network that fund technology businesses in your state; they decide, typically within 24 hours, and funds can land in as little as 72 hours.
| What you need it for | What usually fits | Why |
|---|---|---|
| Hiring engineers and sales staff | Business line of credit | You pay only for what is drawn while recurring revenue catches up. |
| Product development ahead of revenue | Equity rather than debt | A company planning to run at a loss for years is usually raising equity, not borrowing. |
| Go-to-market and customer acquisition | Working capital loan | Sized to recurring subscription revenue, which funders can read directly. |
| Infrastructure and tooling | Business line of credit | Uneven bills, such as an annual hosting renewal, suit a line. |
| Bridging to a funding round | Working capital loan | Only if repayment does not depend on the round closing. |
How does each kind of funding work for technology?
Checked by Alex Makowski.
Two things decide how each product behaves in a trade: how the money comes in, and whether the need comes back. An advance repaid as a share of card sales falls in a slow week; one repaid by a fixed daily or weekly debit against deposits does not. Equipment secures its own financing, so it costs less than unsecured money. A line costs interest only on what is drawn, for the days it is drawn, and is the hardest of the four to open, usually needing a year or two of trading and clean statements. A working capital loan has fixed repayment, so size it to your slowest month.
Merchant Cash Advance for technology
Subscription revenue arrives by card or invoice, so an advance can be repaid from either. It is a poor fit for a company that is not yet profitable: the cost is fixed and repayment starts at once, out of revenue already spoken for by payroll. It suits a short bridge for a company with steady recurring revenue, and little else.
Working Capital Loans for technology
Fits go-to-market spend and short bridges when monthly recurring revenue is steady and churn is low, both of which funders can read straight from deposits. Size it so repayment does not depend on a funding round closing or a new product landing.
Equipment Financing for technology
Servers, networking gear, developer workstations and hardware for an on-site deployment can be financed. Most software, cloud hosting and development work cannot, because there is nothing a lender could recover. For a cloud-only software company this is the smallest of the four needs.
Business Line of Credit for technology
The best fit for hiring ahead of revenue and for lumpy bills such as an annual hosting renewal or a conference sponsorship. A company with a record of subscription income and low churn is a good candidate, and a line keeps a bridge from turning into a fixed payment it does not need.
What your deposits support
Before you apply
What to have ready before you apply.
- Six months of business bank statements.
- Monthly recurring revenue and retention, which are the two numbers that move the offer.
- Whether contracts bill monthly or annually — annual billing changes the deposit pattern considerably.
FAQ
Technology: questions owners ask.
- Can a software company get funding without giving up equity?
- Yes, and that is the main reason to use revenue-based funding. It is repaid from revenue rather than sold against ownership.
- How is recurring revenue underwritten?
- Lenders look at monthly recurring revenue, churn and deposit consistency. Predictable subscription income underwrites well even without profitability.
- How does this compare to raising a round?
- Funding arrives in days rather than months and costs no equity, but it must be repaid from revenue. It suits bridging and growth spend rather than long unprofitable build phases.
Guides
Guides on this
Why do banks turn down technology companies for loans?
Because software businesses are asset-light and frequently unprofitable on purpose, which fails a bank's model on both counts. Recurring subscription revenue, though, is some of the most predictable income any underwriter sees — and a funder reading it can lend where the balance sheet says no.
You signed a contract that needs three hires before the first invoice. What funds sixty days of new payroll?
A working capital loan sized to the new hires' fully loaded cost for the gap between their start date and the contract's first payment — typically sixty to ninety days — funded in one to three business days on your existing deposits, with the signed contract attached. It is a dated gap with a named repayment source, which is the easiest kind of file to write. If every new contract starts this way, a line of credit is the shape for the pattern.
One application, every lender we work with
Find out what you qualify for before you need it.
Eleven questions, about two minutes. You see offers side by side and take one, or none.
- Won't affect your credit
- Free, no obligation
- Decisions usually inside 24 hours
- Up to $500K