Introducing the ROSE Loan Facility—A New Way to Finance Growth Companies

Runway Growth Capital
  |  
February 12, 2018

Runway Growth Credit Fund is excited to formally introduce our newest loan structure to the market, which we call the ROSE—the Runway One-Stop Enterprise Loan Facility™. This structure is another example of how Runway Growth Credit creatively lends capital—as well as relationships, experience, and passion—to help fast-growing, dynamic companies achieve their fullest potential.

INTRODUCING THE ROSE:

Runway Growth Credit has created the ROSE Loan Facility™ in response to strong market demand. This facility is well-suited for companies that have meaningful accounts receivable (A/R) or monthly recurring revenue (MRR) in addition to other growth capital needs.

The ROSE combines the features of a bank line of credit with a term loan, all in a single facility, at a single rate, and with a single lender. Borrowers benefit from the ROSE in multiple ways:

  • Immediate access to growth capital, often in a quantum larger than banks can provide
  • No intercreditor agreement to negotiate with multiple lenders
  • No annual renewal with a bank, which often leaves borrowers subject to changing bank underwriting standards
  • Lower amortization schedule, making more growth capital available to borrowers over a longer period of time
  • Lower interest rate compared to a term facility of the same size
  • Ability to expand the facility over time as the borrower performs
  • In addition to the ROSE, we also specialize in senior lending to fast-growing companies under more traditional term loans, including multi-tranche facilities.

ROSE STRUCTURE AND FEATURES

The ROSE is structured as follows:

  • Single rate for entire facility
  • Standard covenant package, in line with how Board manages company
  • 30-45 days to close
  • Market-based fees
  • Modest warrant coverage or other upside participation

Term Loan Portion:

  • Immediate availability + draw
  • 3+ year maturity with upfront interest only (IO) period; can extend IO based on performance
  • Monthly amortization after IO period
  • Can convert term loan to A/R or MRR loan facility if capacity available

Line of Credit Portion:

  • Advance rate calculated on borrowing base (A/R or MRR)
  • Doesn’t amortize—due at maturity date
  • Overadvances can convert to term loan
  • Lender can expand facility capacity over time based on performance

ABOUT RUNWAY GROWTH CREDIT

Led by industry veteran David Spreng, Runway Growth Credit Fund (runwaygrowth.com) makes $5 million to $30 million direct loans to fast-growing U.S. and Canadian companies as an alternative to raising equity. We make loans to both Sponsored companies (funded by venture capital or institutional equity) as well as Non-Sponsored companies (bootstrapped or funded by entrepreneurs themselves).

We look for world-class management teams that need our capital to grow—whether that’s market share, revenue, profitability, production or capacity. We back companies with strong intellectual property (IP) behind their products and services—we can lend where banks can’t, and unlike equity, we are minimally dilutive capital—enabling financial backers, founders and management teams to own more of their own companies.

We understand what it takes to be a true partner to entrepreneurs who are working hard every day to make their companies successful. We move quickly when needed, are patient when prudent, and provide measured, thoughtful expertise around the capital needs of rapidly growing enterprises.

We have partnered with funds managed by Oaktree Capital Management, L.P. (oaktreecapital.com), which serves as a strategic investor and partner. Oaktree is a leader among global investment managers specializing in alternative investments, with $100 billion in assets under management as of December 31, 2017.

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