Software Debt Q3 2025 Benchmarks

As of Q3 2025, the country’s largest publicly traded direct lenders collectively hold $23.4 billion of software-related loans on their books across 622 software companies. The average BDC in this group has between 15% and 25% of its portfolio invested in software.

To qualify for these loans, the typical portfolio company needs a median EBITDA ranging from $50 million to over $300 million, depending on the Lender:

• Ares Capital‘s weighted average borrower EBITDA sits at $305 million.
• FS KKR, MidCap Financial, and Morgan Stanley Direct Lending cluster between $51 million and $115 million.
• Main Street’s lower-middle-market borrowers average $10–34 million in EBITDA.

The Lenders will loan 5–6x EBITDA, with the tightest performers (FSK, MFIC, MSDL) sitting right at 5.3x–5.9x, and venture-style lenders (Trinity, Hercules, Horizon) not reporting EBITDA-based leverage because their portfolios skew toward pre-profit technology companies.

On pricing, BDCs are currently lending at 10–13% headline yields, with Hercules and Trinity posting the highest effective yields (16%), and giants like Ares, Blackstone, Blue Owl, Golub, and Goldman all landing between 10% and 12%.

Founderpath is lending to earlier stage companies which are generally more risky than companies that take loans from the BDC’s. Founderpath uses BDC data to help guide its pricing.

Lets look at the updated Q3 2025 data set.

If I Have $100m+ in ARR, What Interest Should I Pay?

Primary Lenders: Blue Owl (OBDC/OTF), Ares Capital, Blackstone

Interest Rate: 10.5% to 12.5%

Profile: These companies are often backed by large equity sponsors like Thoma Bravo, Vista, or Insight. The focus is stability and low loan-to-value (LTV <30%). Even at this scale, they are paying double-digit interest.

Software Loans Done in 2025 to $100m+ ARR Companies:

Name	Lender	Loan Size	Interest Rate (%)	Origination	Maturity	Notes	Est. Revenue
Arctic Wolf	Blue Owl	$185.4M	11.31%	Feb-25	2028	Security Ops	$400M+
Boomi	Blue Owl	$212.1M	11.56%	Jan-25	2029	IPaaS Leader	$500M+
Acquia	Blue Owl	$178.9M	11.06%	Mar-25	2028	DXP Platform	$300M+
ConnectWise	Ares Capital	$145.0M	11.81%	Jan-25	2029	IT Mgmt Software	$800M+
Diligent	Ares Capital	$112.5M	11.31%	Apr-25	2028	Governance SaaS	$600M+
Checkmarx	Blue Owl	$147.5M	12.06%	Feb-25	2029	AppSec Testing	$150M+
Delinea	Ares Capital	$88.0M	11.06%	Mar-25	2028	Privileged Access	$250M+
Dragos	BlackRock	$65.0M	11.56%	May-25	2029	OT Security	$100M+
Relativity	Blue Owl	$220.0M	10.81%	Jan-25	2028	Legal Tech	$400M+
Sitecore	Ares Capital	$130.0M	11.81%	Feb-25	2029	CMS Leader	$350M+
Druva	Blue Owl	$75.0M	12.06%	Jun-25	2029	Cloud Data Protection	$200M

If I Have $20m-$50m in ARR, What Interest Rate Should I Pay?

Primary Lenders: Hercules Capital (HTGC), Horizon (HRZN)

Interest Rate: 13.5% – 15.5%

Profile: These companies are high-growth but often burning cash. Lenders charge a premium for the risk but offer 24-36 months of Interest-Only (IO) periods to preserve runway.

Software Loans Done in 2025 to $20m+ ARR Companies:

Name	Lender	Loan Size	Interest Rate (%)	Origination	Maturity	Notes	Est. Revenue
Vesta Healthcare	Horizon	$25.0M	13.50%	Aug 2025	2028	Clinical Services	$40M+
Pinecone	Hercules	$35.0M	13.00%	Jul 2025	2029	Vector Database	$30M+
SeatGeek	Hercules	$50.0M	11.75%	Feb 2025	2027	Event Platform	$100M+
Planet Labs	Hercules	$67.0M	12.45%	Mar 2025	2028	Satellite Data	$200M+
Transmit Security	Hercules	$30.0M	13.75%	May 2025	2028	Identity Mgmt	$60M+
Pivot Bio	Horizon	$10.0M	14.10%	Sep 2025	2027	AgTech SaaS	$50M+
Vast Data	Hercules	$40.0M	12.50%	Apr 2025	2028	Storage Platform	$80M+
Spineology	Horizon	$16.0M	13.80%	Jun 2025	2028	MedTech	$25M+
TemperPack	Horizon	$15.0M	13.90%	May 2025	2027	Packaging Tech	$45M+
Impossible Foods	Hercules	$75.0M	12.25%	Jan 2025	2028	Food Tech	$100M+
Rent The Runway	Hercules	$45.0M	14.00%	Refi 2025	2027	Fashion SaaS/Logistics	$200M+

Do Recurring Revenue Companies with $100m+ in ARR Pay 15%+ Interest Rates?

Answer: Yes. In certain situations like the examples below.

Primary Lenders: Trinity Capital (TRIN), Sixth Street (TSLX)

Interest Rates: 15% – 17%

Profile: For companies needing flexible structures, dealing with complex cap tables, or turnarounds. These borrowers trade rate for flexibility.

Name	Lender	Loan Size	Interest Rate (%)	Origination	Maturity	Notes	Est. Revenue
Next.e.GO	Trinity	$22.2M	16.75%	Feb-25	2027	Manufacturing Tech
Angel Studios	Trinity	$100.0M	15.20%	Apr-25	2029	RecurringMedia Platform	$100M+
Matterport	Sixth Street	$40.0M	13.81%	Mar-25	2027	3D Spatial Data	$150M+

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D. The “IO vs. Exit Fee” Trade-Off

Primary Lenders: Horizon, TriplePoint, Hercules

Pricing: Lower coupon now, high fee later.

The Pattern: In 2025, we are seeing a direct correlation between IO Extension and Exit Fees (Final Payments). If a borrower wants 24+ months of IO, the lender increases the backend fee to maintain IRR.

Examples of Recent Exit Fees / EOT Payments

Borrower Name	Lender	Loan Size	Exit Fees	IO Period	Interest Rate	Maturity	Notes
Slingshot	Horizon	$20.0M	6.50%	24 Mos	12.5%	2028	EOT Payment
Lemongrass	Horizon	$6.2M	5.00%	18 Mos	13.0%	2027	Prepaid early
MyForest Foods	Horizon	$3.8M	7.75%	30 Mos	12.0%	2028	High Backend
Nextdoor	Hercules	$50.0M	4.95%	24 Mos	P + 4.0%	2029	Standard Deal
LogicSource	Hercules	$25.0M	5.50%	24 Mos	P + 4.5%	2028	Procurement
Udacity	Hercules	$40.0M	6.25%	36 Mos	P + 5.0%	2027	Long IO
Farmer’s Business	Hercules	$30.0M	5.00%	24 Mos	P + 3.5%	2028	AgTech Network
Boyle Software	TriplePoint	$5.0M	8.00%	12 Mos	P + 7.0%	2026	Short Term
ClassPass	TriplePoint	$35.0M	6.50%	24 Mos	P + 5.5%	2028	Marketplace
Monzo	Hercules	$40.0M	4.25%	18 Mos	P + 4.2%	2028	FinTech

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Examples of Real Borrowers Paying OID to BDC / Private Credit Lenders

Borrower	Category	Facility Type / Size	OID / Issue Price	Source
Accelya	Airline software / revenue management	$600M first-lien term loan refinancing (private credit refi to broadly syndicated loan)	Priced at 98 OID (i.e., 2% original issue discount off par)	Octus article on Accelya refinancing (Octus)
Rocket Software	Infrastructure & mainframe software	$1.6B Term Loan B refinancing	Priced at 98–98.5 (≈1.5–2.0% OID vs. par 100)	Jefferies LevFin update showing Rocket Software TLB at 98–98.5 (Jefferies.com)
Upland Software	B2B enterprise work-management SaaS	$350M 7-year senior secured Term Loan B	Deck shows $7M “financing fees, expenses and OID” on the $350M TLB (≈2% of loan amount allocated to fees/OID bucket, i.e. low-single-digit % OID)	Upland lender deck – sources & uses slide (Q4 Capital)
eResearchTechnology (ERT)	Clinical trials / e-clinical software	$750M first-lien term loan	Launched at 98.79–99 OID (≈1–1.2% OID) and earlier add-on “sets OID at 99½”	Prospect News item: ERT launches $750M first-lien term loan at 98.79–99 OID (Prospect News)

Priced at 98 OID means the lender funded 98% of the principal value at close after holding back the 2% OID fee.

Borrower	Sponsor	Lenders (BDC / Private Credit)	Loan Type	OID Paid
PowerSchool	Vista Equity Partners	Ares (ARCC), BlackRock, KKR, Owl Rock (ORCC)	First-lien term loan	2.00%
Imprivata	Thoma Bravo	HPS, Blackstone Credit (BXSL), Blue Owl	First-lien + second-lien unitranche	2.50%
Ultimate Kronos Group (UKG)	Hellman & Friedman	Ares, KKR, Apollo, HPS	First-lien term loan	1.50%
Apex Group	Genstar Capital	Blackstone, HPS, Ares	First-lien term loan	1.75%

Conclusion: The “Founderpath Premium” Logic

When a founder asks why our rates are 15% to 20%, we point to the data above.

1. The Floor: Massive, $500M+ revenue companies like Boomi and Relativity are paying ~11-12% for capital.
2. The Middle: $50M revenue companies like Vesta and Pinecone are paying ~14-15%.
3. The Founderpath Customer: For companies doing $1M to $30M in ARR, risk is naturally higher.

Founderpath believes that to access $1M to $20M in non-dilutive ARR financing, founders should trade at a 4% to 5% premium above what these much larger SaaS companies are paying.

We don’t price arbitrarily. We price relative to the giants.

16% is not “expensive.” It is the fair market rate for your scale in 2025.