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 to address the conversion of such transactions to more conventional earnings-based financing in the financing documents.
- RRF 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 converting the loan to a more conventional EBITDA-based financing?
Mr. Cabe represents institutional clients in secured and unsecured commercial financing transactions. These... | Read More
Mr. Cabe represents institutional clients in secured and unsecured commercial financing transactions. These transactions include a range of borrowers such as public and private corporations, life science and technology companies, venture capital funds, real estate investment funds, and other private equity firms.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
Alexandra E. Ciganer
Ms. Ciganer is an associate in Troutman Pepper’s Technology and Venture Lending practice in Los Angeles, Orange... | Read More
Ms. Ciganer is an associate in Troutman Pepper’s Technology and Venture Lending practice in Los Angeles, Orange County and San Francisco. She has a broad range of experience representing commercial banks, noninstitutional lenders and private and public corporate borrowers in secured and unsecured lending transactions with an emphasis on bilateral and syndicated capital call lines of credit and subscription based credit facilities, asset based loans, life science lending transactions, energy resource technology credit facilities, acquisition financing arrangements, and equipment financings. These transactions involve public and private technology companies, venture capital and private equity funds, life science and biopharmaceutical companies, and high net worth individuals.Close