Every debt option for SaaS, side by side.

Venture debt, term loans, revenue-based financing, credit lines. Who qualifies, what each really costs, and when it's the wrong choice. No sales pitch.

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The comparison

Indicative ranges for US and Canadian SaaS companies. Last reviewed October 2026. How we research.

Structure	Best for	Typical size	All-in cost	Dilution	Covenants	Time to fund
Bank venture debt	VC-backed companies within ~6 months of an equity round	~25–50% of the last equity round	Lowest rates in the category, plus fees and small warrants	Small warrant coverage	Often minimum cash, banking relationship, investor-support tests	4–8 weeks
Venture debt funds	VC-backed companies that need more capital or flexibility than a bank offers	Larger than bank facilities, often tranched	Low-to-mid teens interest, plus fees, final payment and warrants	Warrants, typically more than banks	Fewer than banks, traded for higher price	4–8 weeks
Growth term loans	Capital-efficient SaaS at ~$2M+ ARR, VC-backed or not	Commonly sized at a multiple of MRR	Low-to-high teens, plus fees; warrants vary by lender	None to modest, depending on lender	Financial covenants (e.g. minimum cash or revenue) are common	4–8 weeks
MRR / ARR lines of credit	SaaS with predictable recurring revenue that wants capacity to draw over time	Borrowing base that grows with MRR	Floating interest plus fees; often similar to term loans	Usually none or minimal	Borrowing-base and reporting covenants	3–8 weeks
Revenue-based financing & advances	Smaller or bootstrapped SaaS with $10K+ MRR needing fast, short-term capital	Roughly 1–4× MRR per draw	Flat discount or fee; annualized cost can be high on short terms	None	Minimal; repayment tied to revenue or fixed schedule	Days
AR factoring	Companies with large invoices from creditworthy customers	A share of eligible receivables	Discount on each invoice; varies with customer credit	None	Light; lender may contact your customers	Days to weeks
SR&ED financing (Canada)	Canadian companies with refundable SR&ED tax credits in progress	A share of the expected credit	Interest or discount until CRA pays out	None	Tied to the claim	Weeks
Merchant cash advance Use with caution	Rarely the right fit for SaaS	Small	Factor rates that usually annualize far above other options	None	Daily or weekly remittance; aggressive collection terms	Days

Guides by structure

Growth term loans for SaaS
Multi-year senior debt for capital-efficient SaaS companies, underwritten on recurring revenue and retention rather than on who your investors are.
Revenue-based financing for SaaS
Fast, short-term capital advanced against future recurring revenue. Easy to get, no dilution, but the annualized cost can be higher than it looks.
Bank venture debt
Guide in progress.
Venture debt funds
Guide in progress.
MRR / ARR lines of credit
Guide in progress.
AR factoring
Guide in progress.
SR&ED financing (Canada)
Guide in progress.
Merchant cash advance
Guide in progress.

Three things founders get wrong

Comparing the headline rate

The interest rate is the smallest part of the cost. Add fees, final payments, warrant value and what the covenants stop you from doing.

Treating equity as free

Equity has no coupon, but selling 15–25% of a growing company is usually the most expensive capital you'll raise. Run the dilution math before assuming debt is the costly option.

Borrowing to survive

Debt extends a runway that already works. It doesn't rescue one that doesn't. If repayment depends on things going right, it's the wrong tool.