SG Credit Partners provided a senior secured, $3 million growth capital loan structured around an ARR borrowing base to a founder-owned AI software subscription and services company and provided tailored amortization around the company’s cyclical cash flow.
The company provides a management platform for microservice-based enterprise applications and has services revenue of $10 million and SaaS revenue of $3 million. The company grew its annual recurring revenue (ARR) base from $2 million to $3 million over the course of 12 months with no outside investment. In order to raise an equity round at a high valuation, it needed to drive ARR up to $5 million in 2020. This would require investment in software development and hiring additional sales personnel, but the company was under a cash constraint due to the cyclical nature of its contracts. The majority of the company’s contracts are tied to government agencies and therefore tied directly to the annual government budget and spending cycle. The company needed near term liquidity to fund research and development and sales initiatives in order to achieve its revenue growth goals in 2020.
SG Credit Partners (formerly known as Super G Capital) provides $1 million to $10 million structured debt solutions to lower middle market businesses across the country in need of financing for working capital, growth capital, acquisition capital, or special situations.