The Best B2B Financing Companies in 2024
Are you contemplating scaling your operations or extending your runway for that crucial leap to the next level? Perhaps you're dealing with lengthy contracts and want to ease the hassle of no upfront payments. Maybe your goal is simply to secure financing for your SaaS brand. If any of this sounds like you, you're in the right place.
For founders navigating these waters, securing funds is often a top consideration. And why not? With a plethora of funding options, raising capital has become much easier and faster.
This is a guide to everything you need to know about different SaaS funding options, along with the top B2B financing companies under each category. We’ll also discuss each funding option’s pros and cons because every funding option has its downsides, too.
Let’s begin!
B2B Revenue-Based Financing Companies
This funding avenue is gaining traction among startups and stacks up against traditional funding options for all the right reasons. For many founders, safeguarding equity and ownership are the primary goals while raising funds. Revenue-based financing is a strategic solution for these founders by providing capital based on the company’s performance and revenue.
1. Capchase
Providing a dynamic funding structure to SaaS companies, Capchase stands out as a revenue-based financing option. The platform was built to overcome the limitations in traditional financing, like venture capital and debt. Capchase aims to reduce time-to-revenue for SaaS founders by offering flexible financing solutions.
The Capchase suite of products includes two financing platforms designed to help SaaS businesses' both long-term and short-term financing needs.
1. Capchase Grow
Capchase Grow is designed to align with your current growth stage. It offers non-dilutive capital injection that scales harmoniously with your projected ARR. This ensures that you steer clear of shouldering excessive debt burdens or loss of ownership. Capchase Grow allows you to access up to 70% of your future ARR in as little as 48 hours.
2. Capchase Pay
For your short-term or working capital requirements, Capchase empowers you to offer flexible payment terms to your customers while still collecting the total value of an annual or long-term contract upfront. Not only does this financing option boost conversions and renewals, but it also speeds up your sales cycles and reduces pricing-associated negotiations such as discounts.
Capchase is a revenue-first and founder-friendly platform ideal for SaaS startups looking to retain complete company control and grow on their own terms.
2. Clearco
Clearco is a premier investor providing equity-free capital solutions to e-commerce and SaaS businesses. It gives founders several finance options, including inventory funding, line of credit, and marketing funds.
The amount of funding ClearCo offers ranges from $10K to $20M. It also has minimum eligibility criteria, including the following:
- 6+ months of revenue greater than $10k/month from connected sales platform(s)
- Funding only to corporations or limited liability companies
ClearCo costs can range from 8% to 14%. The exact cost depends on how you use your resources. Once you choose your funding offer, ClearCo offers a precise amount.
Clearco is ideal for eCommerce LLCs looking for equity-free capital solutions.
3. Re:cap
Another RBF platform on our B2B financing companies list that offers non-dilutive debt funding is Re:cap. It provides financing specifically to SaaS and software companies with subscription-based business models.
Re:cap provides an initial funding opportunity of up to €5m, which can increase as your business grows and evolves. The repayment comes with a fixed interest rate. Re:cap doesn't require any equity share or collateral for their investments. The associated costs vary, ranging from 2% to 15% on each financing round.
The platform also has some eligibility requirements:
- Businesses with a subscription-based model.
- EU-based companies with legal entities partly located in the EU.
- Businesses with at least six months of runway when drawing the funding.
Re:cap is suitable if you’re a SaaS company based out of the EU with predictable revenue growth.
4. Viceversa
Viceversa provides revenue-based funding to online businesses such as online marketplaces, B2C, B2B e-commerce, and subscription services based in Europe. The company leverages your financial, business, and marketing track record to generate a funding offer. It offers equity-free capital from €10K to €5M in five simple steps - application, offer, negotiation, approval, and marketing investments.
To be eligible for Viceversa funding, your business should have:
- More than six months of online sales.
- Monthly revenues equal to or above €10,000.
- An online business model like SaaS, Subscription, E-commerce, Mobile App, or D2C.
- An online marketing budget above €10,000.
Viveversa is ideal for European online businesses seeking innovative and flexible financing solutions.
Pros and Cons of Revenue-Based Financing
By eliminating interest payments, collateral demands, and the need for equity dilution, RBF stands out as the optimal choice for B2B companies. It is also suitable for companies that are not looking for imminent funding. RBF also helps inject cash into capital-intensive workflows, providing businesses the financial agility to navigate their unique growth trajectories.
B2B Venture Capital Firms
Venture capital is one of the most common financing options for startups of all sizes. VCs expect a swift and healthy return on their investments and take equity in return for the investment they offer.
1. Accel
Formerly known as Accel Partners, Accel is a prominent global venture capital firm. It works with startups in seed, early and growth-stage investments. It focuses on tech-based startups from Europe, Asia, and the United States.
Accel's investments range over a broad spectrum of stages, from incubation to growth stage. Its seed and early-stage investments include Dropbox, Facebook, Slack, and more. Accel’s previous Series A investments have ranged between $4,4 - 25 million and take stakes in its portfolio companies. Accel majorly seeks investments in companies with a minimum sales value of $5 million.
2. Emergence Capital
Emergence Capital Partners is an enterprise-focused venture capital firm based in California. The firm invests in five to seven SaaS companies every year. It's dedicated to early-stage enterprise technology, focusing on cloud and business software.
Emergence Capital was an early investor in companies like Zoom and funded Salesforce, Yammer, Veeva, and Box.
3. Sequoia Capital
Next on our B2B financing companies list is Sequoia Capital, a stage-agnostic investor focusing primarily on technology and innovation. It has supported over 1500 companies worldwide.
Sequoia Capital is an umbrella brand for three different venture entities.
- One focused on the U.S. and Europe.
- Another focused on India and Southeast Asia.
- The third focused on China.
All three venture entities concentrate on different areas. For instance, Sequoia China and Sequoia India invest heavily in healthcare and e-commerce.
4. Tiger Global Management
Not only a venture capital fund, Tiger Global also operates in private equity, and other investment forms. With an AUM of $125B, it focuses on both public and private companies in the global Internet, software, consumer, and financial technology industries.
Its public equity business employs a long-term investment approach to invest in high-quality companies led by excellent management teams. And its private equity investments cover a spectrum from Series A to pre-IPO.
Tiger Global Management has 200+ companies with a value of over $1 billion in its portfolio, including CRED, Revolut, and Qonto.
Pros and Cons of Venture Capital
While VC funding can often be an excellent source for startups, it has also experienced a notable decline, with a 39% decrease in deal count and a 35% drop in dollar value. The B2B landscape is changing; founders want to be minimally dilutive and want quicker funding.
B2B Venture Debt Financing Companies
Venture debt is a quick source of capital that helps start-ups get on their feet. It provides companies with an incremental cash runway and comes with very few strings attached.
1. Flow Capital
Flow Capital stands out in the venture debt financing niche, primarily catering to tech and SaaS companies based in North America and the UK. They also specialize in founder-friendly growth capital through revenue-based financing.
Targeting capital-efficient, high-growth, and tech-enabled companies, Flow Capital offers $1M to $7M in financing. It also has some eligibility requirements:
- Based in the United States (US), United Kingdom (UK), or Canada
- Looking for $1-3 million in the first round (and a max of $5 million overall).
- You should be a mature startup with more than $4 million annual revenue or an annual recurring revenue (ARR) greater than $2.5 million.
This firm is a viable option for businesses seeking substantial growth capital without significant equity sacrifices.
2. FundBox
Fundbox is an AI-powered financial platform specializing in lines of credit and term loan options. They provide up to $150,000 in working capital financing. The platform’s fees may vary for each customer and over time. They generally charge a fee rate of 4.66% of the amount drawn for 12-week terms and 8.99% for 24-week terms.
Fundbox is ideal for small businesses needing immediate capital infusion for short-term needs. Their flexible repayment terms and no prepayment penalty policy cater to businesses looking for manageable, short-term financial solutions without long-term commitments.
3. Hercules Capital
Hercules Capital is a leading venture lending firm for innovative entrepreneurs, particularly in the tech and life sciences sectors. As a prominent company focused on venture lending, they offer a range of financing solutions to high-growth, asset-light companies.
Hercules Capital often requires VC sponsorship to secure venture debt, making it a go-to for VC-backed businesses seeking substantial growth capital.
4. River SaaS Capital
River SaaS Capital specializes in non-dilutive funding for high-growth B2B SaaS businesses. They provide flexible financing solutions in debt (initially) and equity (long-term). The company extends loans between $500,000 and $1.5 million (typically MRRx4) to eligible businesses. They also have qualifying criteria for SaaS businesses:
- A minimum MRR of $150k (or $1.5 million ARR)
- A SaaS business model
- Must be based out of the US.
Pros and Cons of Venture Debt Financing
Venture debt is ideal for companies burning a lot of capital and operating within a condensed timeline toward an exit. However, it may not suit you if you’re considering long-term growth financing. The cost dynamics of venture debt are such that it offers limited cash runways for extended expansion.
How to Find the Right B2B Financing Company?
Taking on debt at double-digit interest rates can be scary, especially in the early stages of your startup. And it’s not worth diluting equity and ceding business control for a few million dollars. Luckily, there are a lot of B2B financing companies that have deep knowledge and appreciation for complex sales, customer success, account-based marketing, distribution, partnerships, and other strategies that are more common in B2B. An investment from one of the best B2B funding companies can increase your chances of accelerating your growth rate and reduce the risk of tension and friction down the road.
All you have to do is follow the below steps to find the right financing partner for your business.
- Outline your financing requirements: Why do you need financing, whether it's for working capital, expansion, equipment purchase, or other specific purposes?
- Assess your financial situation: Understand your current situation, including credit score, cash flow, and existing debt.
- Research your financing options: Explore various financing companies in the B2B space. Leverage this guide and explore the B2B financing companies list shared above to assess each funding option’s advantages and limitations.
- Compare interest rates and terms: Compare interest rates, repayment terms, fees, and other relevant terms. Choose a company that aligns with your strategic business plans.
- Consider flexibility: Choose a financing company that offers flexibility in repayment schedules, early repayment options, and adjustments to financing terms if needed.
Final Thoughts
Finding the right B2B SaaS financing provider is paramount, especially if you’re on a heavy growth trajectory. Now that you have the list of the best B2B financing companies, making a choice should be easier.
Raising capital from B2B native investors like Capchase ensures founders don’t wait on approvals, make personal guarantees, or relinquish their equity to fund their online business’s growth.
With Capchase, you can select the mode of financing that fits your capital requirements and your business goals. Talk to our team to understand which funding model can help fuel your growth!
