Founderpath Frequently Asked Questions

What types of funding products does Founderpath offer?

We currently offer two main products for B2B SaaS founders:

• Revenue-based financing: simple, fixed monthly payments over a set term (typically 12–36 months).
• Term loans / credit facilities: larger, multi-year facilities (typically 3–4 years) with the option for an interest-only period if you qualify.
• Merchant cash advances: for CPG brands, agencies, and e-commerce businesses. Pay back as a percent of your sales over 6–12 months.

Most founders start with revenue-based financing and graduate into a term loan as they scale.

How much can we borrow from Founderpath?

We typically lend up to 50% of your current revenue on day one. For example, if you are at $2.5M ARR, you could see offers up to roughly $1.1–$1.2M in total facility size, depending on your metrics and existing debt.

Do you lend based on ARR percentage or MRR multiples?

We think in terms of ARR, not just MRR multiples. While some founders talk about “3–7x MRR,” our internal rule of thumb is:

Up to approximately 50% of your current ARR as the maximum day-one exposure.

The actual offer will depend on your retention, growth, margins, and debt stack.

Does the facility grow as our ARR grows?

Yes. As you grow your ARR, your available capital with Founderpath can increase as well. If your ARR increases, we recalculate how much additional capital we can safely advance based on the same 50%-of-ARR cap and your updated metrics.

What is the difference between revenue-based financing and the term loan?

Revenue-based financing:

• Fixed monthly payments to a set maturity (typically 12–24, sometimes up to 36 months).
• No legal or origination fees on top.
• Collateral usually limited to accounts receivable.

Term loan / credit facility:

• Larger facility aimed at SaaS businesses doing approximately $3–5M+ ARR (USD).
• 3–4-year amortization, with 15–19% annual interest, depending on underwriting.
• May include 12–24 months of interest-only if you qualify.
• Collateral is usually all assets of the company.

What discount rate do you charge on revenue-based financing?

Our discount rates range from 7% up to 13%. Where you land in that range depends on:

• What you integrate (accounting, banking, revenue per customer, etc.).
• Your retention and customer concentration.
• Your overall risk score.

The better and deeper the data we have, the more competitive your offers usually are.

What are the payback terms for revenue-based financing?

For revenue-based financing, we typically structure fixed monthly payments over a 12–24 month term, sometimes up to 36 months, depending on the risk profile and your preferences. You will know upfront the total amount you will repay and the exact monthly payment.

What are the interest rates and terms for the term loan?

Our term loans usually come with:

• Interest rate: roughly 15–19% per year, subject to underwriting.
• Maturity: typically 3–4 years.
• Interest-only period: we can offer 12–24 months interest-only at the beginning if your metrics support it.

All of this is finalized during underwriting and spelled out clearly in your term sheet.

Do you require a personal guarantee?

No. Unlike many traditional banks, Founderpath does not require a blanket personal guarantee from the founder. We underwrite the business and its recurring revenue, not your personal assets.

Can Founderpath refinance my existing bank loan?

Yes, in many cases we can. We often refinance existing loans, especially where:

• The founder has signed a personal guarantee, and
• You want to move to a more founder-friendly structure.

Operationally, we have you obtain a payoff letter from your current lender. That letter includes their wiring instructions. We send funds directly to your lender to clear the old loan, then wire any remaining net proceeds to your company.

How does Founderpath treat existing debt on our balance sheet?

We look carefully at your total debt outstanding, your monthly debt service, and your ARR to make sure the company is not over-levered. In many cases:

• We will require some portion of your existing debt to be paid down or refinanced, especially if it is short-term or expensive.
• We usually need existing lenders to subordinate to Founderpath or agree we are in first position on accounts receivable.

Our goal is to make sure your monthly cash outflow to all lenders is sustainable.

Do you always require first position on security?

In most cases, yes. We require first position on the collateral we take (for example, first lien on accounts receivable for revenue-based financing). If you already have a lender in first position, we will look at:

• The maturity length of their loan.
• The size of their facility compared to your ARR.
• Whether they are willing to subordinate.

If we cannot get comfortable with the existing structure, we may ask you to pay down or refinance part of the debt so that Founderpath can sit first.

Can Founderpath coexist with venture debt or other credit facilities?

It is possible, but the same rules apply. We will still evaluate:

• Total debt outstanding (including venture debt).
• How that debt is secured.
• Whether Founderpath can be in first position or have acceptable protections.

In some cases we can coexist; in others, we may ask to be paid off first or require changes in the security structure.

Do convertible notes count as debt for your leverage calculations?

Generally, no, unless the convertible note has mandatory monthly payments attached. If it purely converts into equity at some point and does not require regular payments, we do not add it to your debt load for leverage calculations.

What collateral does Founderpath take?

It depends on the product:

• Revenue-based financing: typically a security interest in accounts receivable (AR).
• Term loans / credit facilities: usually a lien over all assets of the company.

We will explain exactly what is covered before you sign anything.

What if we do not use Stripe, Maxio, or another billing platform?

That is completely fine. If you bill via enterprise platforms or more manual processes, you can still work with us. We typically:

• Connect to your accounting system (for example, QuickBooks).
• Have you upload revenue per customer per month via a simple template.

That is enough for us to calculate ARR, retention, churn, and concentration.

What integrations and documents do you require to apply?

At a minimum, we will ask you to:

• Create a Founderpath account.
• Connect your accounting system.
• Connect your banking (or provide statements).
• Upload revenue per customer per month.

We will also request basic data room materials such as:

• P&L and balance sheet.
• Tax returns.
• Existing loan agreements and payoff statements (if we are refinancing).

A wizard inside the Founderpath app walks you through this step-by-step.

How long does it take to get funding?

Once your application and data are submitted:

• Revenue-based financing: underwriting typically takes 3–5 business days, and the closing documents are usually 6–7 pages, so the closing process is fast.
• Term loans: underwriting is still 3–5 business days, but the term sheet and legal documents can be longer. Most companies take 1–2 weeks to review, negotiate, and sign.

In what currency do you underwrite ARR (USD vs. CAD)?

Our internal thresholds and product descriptions are denominated in USD. If you report ARR in CAD (or another currency), we convert to USD for underwriting and for applying ARR thresholds (for example, the $3–5M ARR guideline for term loans). We will be explicit about the exchange rate we use in your offer.

Where does Founderpath get its capital from?

We manage multiple Founderpath-controlled funds with over $200M in dry powder. Over time we have:

• Raised dedicated funds (for example, the TechCrunch-announced Founderpath fund).
• Proven the model with a very low default rate.
• Built enough scale that we now can also invest off our own balance sheet.

We also maintain relationships with large banks and warehouse providers, which gives us additional flexibility.

Is Founderpath financially stable? Are you still lending?

Yes. While many alternative lending and “FinTech” players have pivoted away from revenue financing or stopped lending altogether, our core business has remained the same: non-dilutive capital for SaaS founders and, more recently, e-commerce, agencies, and CPG brands. We have continued to grow our funds, deploy capital, and maintain a very low default rate on our book by being disciplined in underwriting and focusing on long-term relationships with founders.

How is Founderpath different from Pipe, Capchase, and other revenue financing lenders?

A few important differences:

• We specialize in B2B SaaS and have stayed focused on that niche.
• We have maintained rigorous underwriting instead of chasing growth at all costs.
• We are still actively lending on the same core product we started with, whereas several competitors have pivoted away from revenue financing or changed business models after portfolio issues.

The outcome for you as a founder is a stable, long-term capital partner that is built to be around for the next 10–20+ years, not just for the current funding cycle.

Can Founderpath fund an acquisition if I am buying back a SaaS company I previously sold?

Yes. We regularly fund founders who are buying or buying back SaaS companies, as long as the business has stable recurring revenue. In this scenario, we would underwrite the target company based on its current metrics (for example, $3M ARR) and can typically lend up to 50% of ARR, so a request like $500K is well within our range.

The funds are usually used for working capital, growth, or to show “skin in the game” in the acquisition.

Can I get pre-approved financing before the acquisition is completed?

Yes. We can provide a pre-approved offer that is contingent on the acquisition closing. We underwrite the target business upfront using its customer list, financial statements, and basic metrics. If it passes underwriting, we issue an approval that becomes effective once you legally acquire the company (for example, through your LLC).

How do you underwrite a company I am in the process of acquiring?

We ask for a small set of documents from the target company, such as:

• Customer list and contract overview.
• Accounting data (for example, QuickBooks financials).
• Recent tax return.
• Basic ARR, churn, and concentration metrics.

Based on those, we calculate how much we can lend (usually up to 50% of ARR) and present you with an offer, subject to you becoming the new owner.

Does the company need to be owned personally by me, or can my LLC own it?

Your company can be owned by your LLC. In most cases, we expect your entity (for example, your LLC that owns 100% of the SaaS company) to be the borrower and sign the contract. We simply need to confirm that there is no other shareholder who owns more of the business than you, because the majority owner must sign the agreement.

Is the financing really non-personal? Do you require a personal guarantee?

Yes, our structure is designed to be founder-friendly. We do not require a personal guarantee (no PG). The loan is underwritten to the business, not to your personal balance sheet.

Are there any origination fees or hidden fees?

No. We do not charge origination fees, closing fees, or hidden fees on our revenue-based financings. There are zero upfront fees and no covenants. You receive exactly the amount you agree to borrow, and the only cost is the agreed-upon repayment amount over time.

What happens if I want to prepay early?

If you decide to pay off the loan early, you simply pay the agreed repayment amount (principal plus the remaining fees) at the time of payoff. We do not add extra “prepayment penalties,” but because we rely on the scheduled payments to cover our costs, we generally request the full contracted payback amount if you choose to repay early.

How long does it take to go from pre-approval to cash in the bank?

Once we have all the required documents, we typically underwrite in about five business days. If you are approved, we send a simple 6-page closing document that includes all terms and the payback schedule. After you sign and once we have proof that you own the business (for example, through your LLC), we usually wire the funds the same day or the next business day.

Can Founderpath fund a fast-growing company that is breaking even or only slightly profitable?

Yes. We regularly fund companies that are growing quickly but are only breaking even or showing a small profit. Traditional banks often want to see several years of strong net income before they will lend at scale. We understand that fast growth usually means you are reinvesting cash back into the business.

Our underwriting looks at revenue, growth, margins, and leverage much more than it looks at GAAP profitability alone.

Do we have to be profitable to qualify, or will you fund cash-burning businesses?

No, you do not have to be profitable to work with us. We invest in many companies that are still burning cash because they are investing heavily in growth. We focus on:

• Meaningful and growing revenue.
• Reasonable gross margins for the model.
• A clear path to profitability over time.
• A sustainable level of total debt relative to revenue.

Do you offer lines of credit as well as term loans?

Yes. Our term loan product can function very similarly to a revolving line of credit. We will typically approve you for a facility size (for example, $2–3 million). You can then choose how much to draw and when. As you repay and as your revenue grows, we can increase your available capacity over time, up to around 50% of revenue.

What are your general interest rates and terms for a credit facility or term loan?

For our structured term loans and credit facilities, our headline interest rate typically falls between 15% and 19% per year, depending on risk. We normally structure these over a 3–4 year term with a clear amortization schedule so you know exactly what you will pay each month and when the facility matures.

Do you have a flexible product tied to a percentage of revenue instead of fixed payments?

Yes. In addition to fixed-term loans, we offer a more flexible facility where you repay a percentage of your sales instead of a fixed amount. We call this a Merchant Cash Advance.

For example:

• We lend you $500,000.
• You repay us by sending, for example, 10% of your daily, weekly, or monthly revenue until a fixed total payback amount is reached.
• A simple scenario might be borrowing $500,000 and repaying $550,000 via that percentage-of-sales structure.

This can be attractive for seasonal businesses because your payments naturally go down in slower months and up in stronger months.

How long does your diligence process take if we already have a prepared data room?

If your data room is ready, our process is fast. Once you submit the application and connect your data:

• We typically review and underwrite in about 24 hours and send any follow-up questions.
• After you respond, we finalize our internal memo and make an approve / not-approve decision.
• In most cases, you can expect a full decision and term sheet within about five business days from submitting everything.

Can Founderpath work with a multi-entity structure (for example, a UK parent with a US LLC subsidiary)?

Yes. We frequently work with groups that have a foreign parent company and a US subsidiary (for example, UK Limited + US LLC + holding company).

We typically underwrite the consolidated business and then file our security at the parent or holding company level, while also reviewing the intercompany flows and bank accounts. It is helpful if you can provide consolidated financials or a clear bridge between the different fiscal years and entities.

How do you treat merchants that use Stripe, PayPal, and similar processors as the main way of collecting revenue?

That is very common for us. Many of our customers process all of their subscription and e-commerce revenue through Stripe, PayPal, or other payment processors where they act as the merchant of record.

In practice, we simply connect to your accounting system (for example, QuickBooks, Xero) and bank accounts, and we treat those processor inflows as your top-line revenue. Using Stripe or PayPal does not disqualify you from funding.

We already have short-term revenue-based loans from Stripe Capital / Capital Source. Can Founderpath refinance those into a longer-term facility?

Yes. A big part of our business is refinancing expensive short-term revenue-share advances from providers like Stripe, Capital Source, and similar lenders.

Instead of taking a large percentage of your daily or monthly revenue, we can pay off those balances and replace them with a fixed monthly payment over a longer period (for example, 24–30 months). The goal is to lower your effective cost of capital and free up more of your day-to-day cash flow for growth.

What is the difference between Founderpath’s revenue financing and the longer-term term loan / credit facility?

We generally offer two main structures:

• Revenue financing is the fastest and simplest. We can typically provide $1M–$1.5M with a fixed monthly repayment over about 24–30 months. The closing document is only about 6 pages, and deals can be completed in roughly a week once underwriting is done.
• Term loan / credit facility is larger and longer term. We can open a multi-million-dollar facility, with a payback period of up to 4 years and in some cases an interest-only period (for example, up to 12 months). This uses a fuller security package and a longer document set (a 9-page term sheet plus roughly a 60-page credit and security agreement), so timelines are usually closer to 2–3+ weeks to close.

Many founders in a hurry opt for revenue financing first, and then explore a term loan once there is more time for legal review.

How fast can Founderpath fund compared to banks?

Banks often take months to decide and fund. Founderpath’s process is designed for speed. Once your account, integrations, and data room are complete, we typically:

• Underwrite and ask follow-up questions within about 24 hours.
• Issue an approve / not-approve decision and terms within about 5 business days.
• Fund shortly after closing documents are signed (often same day or next business day for revenue financing).

Can Founderpath sit alongside my existing bank loan (for example, from HSBC)? Do banks have to subordinate to you?

Yes. We frequently work alongside existing bank facilities. In many cases, we will:

• File our security (for example, a debenture or equivalent) at the parent / holding company level, and
• Request a subordination letter from your bank so Founderpath can sit in the senior position on specific assets (often receivables).

We have done this with major banks before (including HSBC), and as long as the bank is supportive and the structure is reasonable, there is usually a clear path to having them sit subordinate to a new Founderpath facility.

Do I have to take the full approved amount from Founderpath on day one?

No. With our facilities, you are not required to draw the entire approved amount up front.

For example, if we approve you for $1M–$1.5M, you might choose to draw only $500K initially. As your business grows and your needs change (for example, as you onboard large new customers), you can come back in a few months and draw additional capital from the same facility, subject to the agreed limits and underwriting.

Can we structure funding so that it scales up and down with large enterprise contracts?

Yes. Many of our customers are onboarding large, long-cycle enterprise or institutional clients and want funding flexibility to smooth the ramp-up in hiring and implementation costs.

Our revenue financing and facilities are designed so you can draw when you need extra working capital and pay it back over time without giving up equity. As your direct sales and enterprise volumes grow, your available borrowing capacity with us can expand as well.

Does Founderpath work with bootstrapped, founder-owned companies that have used Stripe Capital or other debt instead of raising equity?

Absolutely. We work with hundreds of bootstrapped operators who have managed to reach meaningful revenue without repeated equity rounds.

Our capital is non-dilutive. We do not take board seats or equity, and we are comfortable supporting founders who want to keep control, clean up expensive short-term debt, and scale toward a meaningful exit in the next few years.