Debt Facility

When negotiating a facility amendment or seeking improved economics, founders often underestimate something simple: Investment committees are overloaded. If you want better terms, don’t send the lender more work — send them a narrative they can take straight to IC. Here’s what that narrative should include. 1. Start With the Strategic Frame Your memo should open with: the de-risking story the partnership value the long-term opportunity the rationale for renegotiation Before s

“Diversify your lenders.” It’s one of the most common pieces of advice founders hear — and often the least practical. Yes, concentration risk is real. Yes, it’s dangerous to rely on one credit provider forever. But the timing and context matter. Here’s a more nuanced way to think about lender concentration. 1. Early in Your Journey, Concentration Is Normal Most fintechs start with: one facility one lender relationship one SPV one set of covenants Diversification at this stage

Covenants exist for a reason: they protect lenders from unexpected degradation in portfolio quality, capital structure, or liquidity. But early-stage facilities often contain covenants that reflect a lender’s fear — not the actual risk of the portfolio. As the business matures, founders naturally want those covenants relaxed. That’s smart. But the how matters. Here’s a practical framework that keeps lenders collaborative instead of defensive. 1. Start With a Partnership Fram

Founders often obsess about the economics of their credit facility: the advance rate, the spread, the eligibility triggers, the covenants. And they should. These terms determine the oxygen supply for the business. But there’s another variable that rarely shows up in a spreadsheet — yet often matters far more: The quality of the lender relationship. In the early stages, many fintechs underestimate the value of a lender who is reasonable, responsive, and collaborative. But ask

For growing fintech lenders, renegotiating a credit facility is both an art and a science. Most companies approach it as a purely financial negotiation — rate, advance rate, covenants, prepayment terms. But the strongest negotiating position rarely comes from spreadsheets alone. It comes from performance data . A fintech we worked with had completed almost two years under its first institutional debt facility. When they entered the facility, the business was young: limited co