Case Study: Debt Financing (Software)

Now that Debt Advisors Group, Inc. (DAG) has consulted with more than 354 companies*, we recognize that the relationships we’ve forged with a variety of lenders has been a key to our success. DAG understands not only our clients’ diverse financing needs but also how to match those objectives with the appropriate lenders based on specific lenders’ risk and loan structure preferences.
This month’s case study illustrates how our knowledge of the lending landscape allowed us to craft a solution for a specialized debt financing need.

Profile

WebTechCo is an angel-backed software company that specializes in client resource management. The company was in the enviable position of having a major Fortune 500 client under contract. However, due to the provisions of the agreement, it could not bill for its services for another six months. Therefore, the company needed to obtain a bridge loan or monetize the “un-billed” portion of the contract in order to eliminate its short-term cash flow problem. WebTechCo’s Chief Financial Officer (CFO) recruited DAG to aid the company in the debt placement process.

DAG’s Evaluation

After careful review of WebTechCo’s financial objectives, DAG advised the company that pursuing an “un-billed” accounts receivable line was more feasible than a bridge loan and would meet the company’s objectives of short-term liquidity enhancement.
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