Revenue-Based Financing Underwrites Revenue Durability, Not Margin A revenue-based facility is repaid from the stream itself, so the underwriting question is whether revenue is stable, repeatable, and predictable enough to support the payment. A business with thin margins and a steady, repeatable revenue stream can support a revenue-based facility. A higher-margin business with lumpy, unpredictable...
Why Asset-Based Lending Can Fund Companies That Lose Money The Collateral Selection Criterion explains why asset-based lenders underwrite eligible collateral, controls, and the working-capital cycle—not last year’s profit. A lender looks at a company that lost money last year and declines. A second lender looks at the same company and extends an asset-based facility....
Financing the Agent Economy Audio dialogue 🎧 Listen to the Audio Dialogue This audio dialogue was generated with AI from this article and is provided for general information only — it is not financial advice, and availability, amounts, structures, and terms depend on each business’s circumstances and are subject to review and approval. The software...
The Operating Cycle Standard: Why SDE and EBITDA Are Entry Points, Not Conclusions Accrual earnings can start the valuation conversation, but working capital, cash conversion, and true free cash flow determine whether a business can sustain the price, debt, and obligations it is being asked to carry. Most lower middle market valuation and credit conversations...
The Balance Sheet Governance Test: Is Your Capital Stack Eroding Your Balance Sheet? How the Harmony-Harm Threshold turns the Supportable Borrowing Base into an ongoing governance standard for multi-instrument capital stacks A capital structure does not fail the moment it crosses a threshold. It fails the moment it crosses a threshold that no one was...
