Recurring Revenue Financing: Structuring, Documentation, and Financial Covenants
Alternative Financing for Early Stage Growth Companies
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE course will examine the unique characteristics of recurring revenue financing (RRF), and the issues lenders and borrowers should consider in structuring recurring revenue transactions. The panel will also discuss how the conversion of such transactions to more conventional earnings-based financing should be addressed in the financing documents.
- Recurring revenue financing as an alternative to traditional ABL borrowing base revolver for growth companies and PE funds seeking working capital or to acquire growth companies
- Borrowing base formulas: eligibility criteria and churn
- Payment features: interest, amortization
- Recurring revenue and liquidity covenants
- Conversion to EBITDA-based financial covenants
- Other structural features
The panel will review these and other important issues:
- What debt financing options are available to companies that do not have earnings?
- How can recurring revenue be used as a basis for pre-EBITDA debt financing?
- How has RRF been used in connection with acquisitions? What percent of the capital stack does it represent?
- What are the typical parameters for allowing the loan to convert to a more conventional EBITDA-based financing?
Ms. Jha’s practice focuses on representing both financial institutions and borrowers in leveraged finance... | Read More
Ms. Jha’s practice focuses on representing both financial institutions and borrowers in leveraged finance transactions. Her experience includes representing clients in secured and unsecured financings in domestic and international transactions involving acquisition finance, asset based loans, cash flow loans, syndicated loans and multi-currency loans. Ms. Jha also represents clients in supply chain, project and aviation finance transactions.Close
Philip J. Tendler
Pillsbury Winthrop Shaw Pittman
Mr. Tendler is the co-leader of the firm’s Bank and Leveraged Finance Team and offers clients the benefit of his... | Read More
Mr. Tendler is the co-leader of the firm’s Bank and Leveraged Finance Team and offers clients the benefit of his deep experience representing borrowers and lenders on a broad range of financing matters. His practice encompasses corporate and project finance, trade receivables securitizations, asset-based lending facilities, term loans (in both the pro rata and term loan B markets), venture debt, mezzanine and subordinated debt, leveraged leases, and distressed and exit financings. Mr. Tendler is an advisory board member of the Institute for Energy Law and, before joining Pillsbury, was an equity securities analyst in the Global Energy and Power Group at Schroders.Close
Justin A. Wood
Mr. Wood represents lenders and borrowers in all aspects of financing transactions, including structuring, documenting,... | Read More
Mr. Wood represents lenders and borrowers in all aspects of financing transactions, including structuring, documenting, negotiating, amending and working out term and revolving credit facilities, syndicated credit facilities, asset-based loans, debtor-in-possession financing, high yield notes offerings, and acquisition financing. His clients include public and privately held companies across a range of industries, money-center and regional banks, private equity sponsors, and emerging growth companies. Mr. Wood’s experience includes advising companies on routine corporate and commercial law matters, private equity sponsors on acquisitions and leveraged recapitalizations, multinational corporations on cross-border financings, and both lenders and borrowers in turnarounds, workouts and restructurings.Close