There’s no one-size-fits-all when it comes to SaaS financing. The right option depends on your stage, revenue, risk tolerance, and how much control you want to keep. Here’s a breakdown of the most common options — and where they shine (or fall short).
1. Equity financing (VC or angel investment)
Best for: High-growth startups building new markets
You raise capital in exchange for ownership. It can fuel rapid growth, but it’s dilutive and time-consuming. Not ideal if you want to stay lean or in control.
2. Venture debt
Best for: Later-stage startups with predictable revenue
Non-dilutive, but comes with interest, covenants, and repayment risk. Often works alongside a funding round. If growth slows, it can become a headache.
3. Revenue-based financing (RBF)
Best for: SaaS companies with steady MRR and clear payback windows
You get capital upfront and repay as a percentage of revenue. Less risky than debt, but repayments can eat into margin during slower months.
4. Customer financing
Best for: SaaS companies selling annual contracts
With customer financing, your customers pay monthly, and you still get paid upfront. Platforms like Lemon make this easy by handling the financing and collecting payments over time.
You get:
- Upfront cash for annual deals
- No debt or dilution
- Fewer budget objections from buyers
It’s like Buy Now, Pay Later — but for B2B SaaS. Especially useful if you want to improve cash flow, extend runway, or offer flexible terms without taking on lending risk.
5. Traditional lines of credit
Best for: Later-stage companies with assets and a balance sheet
Useful for short-term gaps, but harder to access if you’re early-stage or not yet profitable.
