Frequently Asked Questions

Debt financing has many benefits for startups, including:  

• You can invest your time and energy in growing the business instead of pitching equity investors for funding you may never secure.

• You can grow sustainably, at a reasonable cost, managing smaller amounts of capital to move the business forward.

• You maintain ownership and control without selling equity, which is often more costly in the long-run.

Debt financing can give you a strategic advantage in your funding journey, as well.

For example, bootstrapped startups frequently use debt to increase their ownership value at exit. By leveraging debt to gain enough traction and momentum to raise a big equity round, they avoid speculative early-stage valuations and costly equity grabs from VCs and angels. 

At later stages, startups can use debt financing as a bridge in between VC rounds, either funding runway to protect against a down round or to boost results before their next valuation.   

Try our Equity Dilution Calculator to see how you can benefit from raising capital with non-dilutive debt financing instead of selling equity.

Growth capital provides startups with a bigger long-term investment, which enables them to scale the business more effectively than they could with smaller short-term working capital loans or their revenue streams.

Here's how we frequently see founders put their growth capital loans to work:  

• Fund working capital

• Invest in sales and marketing

• Invest in product development

• Hire talent and build out new teams

• Expand into new markets 

• Invest in infrastructure 

• Bridge equity funding rounds

• Restructure old debt

• Buy out tired investors

We offer different types of revenue-based debt financing solutions to support the varying needs of growing early-stage tech startups who want to preserve equity.   

Get upfront capital in a term-based loan with a traditional structure and fixed monthly payments, or get financing with one of our revenue loan facilities. We partner with you to learn your business and find the best type of financing that will help your startup reach its goals.  

Revenue-based financing is a type of non-dilutive debt funding that provides startups with a quick upfront injection of growth capital based on the business’ recurring revenue stream.

Learn more about revenue-based financing >

Payment terms for revenue-based financing are structured as a fixed percentage of your monthly revenue — when your revenue increases over the term of your loan, your payments also increase, and vice versa. 

Growing revenue and growing payments means you’ll pay back your loan faster. If your revenue is down, you'll be slower to pay off your loan; you won't be strapped into monthly payments you can’t make, though!   

Our RBF terms are typically 3 years, but you might pay it off sooner if your business grows quickly.

Our process with new clients typically takes 3-4 weeks, but it can move quicker. Funds are generally available within days of loan approval.  

You don't need to prepare a pitch deck or presentation. There's no valuation negotiation. We do, however, want to ensure that: 

• We're a great fit for each other. 

• We allow time for due diligence.

• You get the best deal to support your short and long-term goals.

Apply online in less than 2 minutes to see what you qualify for.

Well-qualified companies can get up to $4 million. Many of our clients raise multiple rounds through Lighter Capital! 

Apply online in under 2 minutes to see how much you could be approved for.

Yes! Angels and VCs tend to respond positively to debt funding. It gives your company more leverage without diluting equity, which future investors like for two reasons: 

1. It makes the pie bigger for them.

2. Having fewer early-stage investors means there’s more pie to go around.  

There’s also no valuation event, which helps keep everything simple.  Our clients have used our funding to scale their companies and earn better term sheets from prospective investors, and many of our clients go on to raise VC funding.

Unlike a traditional loan, revenue-based financing doesn't have a set payment amount each month. Instead, you pay a fixed percentage of topline revenue until the total repayment cap is reached. The repayment cap varies between 1.3-1.5X the funded amount depending on the health and stage of your business.

Learn more about how revenue-based financing works >

You can pay back your loan (plus return cap) at any time; however, there is generally no incentive for paying back an RBF loan early.   

We honor an exception for a special event within the first year, such as raising a VC round. And if you happen to get acquired, you simply buy us out of the remaining debt on your loan. Then we all celebrate your hard work paying off!

No. Lighter Capital provides revenue-based financing, which means we give you unrestricted capital for growth in return for a small percentage of monthly revenues. “Factors” or “receivables financiers” basically speed up the cash flow from sales that already happened (or are just about to happen). Factoring provides working capital; revenue-based financing is growth capital. It comes with fewer restrictions and impositions on your workflow, and is paid monthly compared to daily or weekly, as with factoring.

There's no catch. We simply understand tech startups.   

There are no hidden fees or gotchas buried in our loan terms like restrictive covenants, or personal guarantees — we promise.  

At Lighter Capital, it's our mission to provide the most founder-centric financing solutions and to be an active, supportive partner in our clients' growth.