When a high-growth tech company is looking to raise capital through debt, the solution is commonly called “venture debt,” a catch-all phrase to describe lending to private tech companies.
Although what we do can be called venture debt, we expand the meaning to something bigger – growth debt. This isn’t semantics or clever word play. The goal of financing is growth. It’s what our partners seek in their businesses and how we construct our solutions to help them get there.
Growth debt and venture debt offer similar benefits, providing lower cost capital and minimizing equity dilution to scale an offering, invest in product, marketing, and sales, enter new geographies, or cushion against unforeseen needs.
Venture Debt | Growth Debt | |
|---|---|---|
Company Stage | Pre-revenue, Seed through Series B | All stages of growth post-revenue |
Underwriting Criteria | An ownership predicated lens, often focused on venture capital investor syndicate | A company-centric lens, crafted around company credit profile, asset value, and progress to profitability |
Equity Ownership Requirements | Validated by familiar VC-backers | Unbiased and open to all backing: VC, PE, sponsored, family office, or bootstrapped |
Timing | Typically raised in conjunction with an equity round | Tailored in coordination with strategic priorities |
Use Case | Capital is often used to extend runway during earlier high cash burn stages | Capital is often used to accelerate the path to profitability or finance specific assets at pivotal stages of growth |
Structure | Term loans and royalty loans | Term loans, royalty loans, lines of credit, and asset-backed lending / warehouse facilities
|
Covenants | Can have minimal covenants, offered with lighter touch support, which can lead to loans not in sync with outcomes | Uses covenants ensuring debt is appropriately sized as a natural, achievable governance tool |
We partner with innovative companies at an inflection point in their business, who are seeking flexible and customized financing, matched to their trajectory and operational needs.
Can have minimal covenants, offered with lighter touch support, which can lead loans not in sync with outcomes
Uses covenants ensuring debt is appropriately sized as a natural, achievable governance tool
SAAS, cloud, mobile, B2B, cybersecurity, and data platforms
Consumer payments and lending strategies, corporate/enterprise lending, property/real estate tech, and auto/fleet, mobility financing
Medical devices, healthcare services, biotech, and healthcare technology
Supply chain, data sharing, communications, computing services, and payment platforms
Telecom, connectivity services, energy management, renewables, and innovative manufacturing equipment
E-commerce and retail technology, travel and hospitality, media and gaming
Not all tech companies follow the same growth playbook. Different models require different financing solutions.
Fintech companies benefit from a specialty debt solution referred to as asset-backed lending, a capital structure solution designed to accelerate their growth.
PFG has extensive experience in asset-backed lending. PFG works with companies to create structured facilities to finance specific pools of receivables or assets, enabling specialty finance and fintech originators to achieve scale.
We are no stranger to global complexities – PFG has deployed warehouse funding across multiple currencies, asset classes, and jurisdictions
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SVB is a leading American bank providing products, services and strategic advice for businesses at every stage. They operate as a go-to commercial bank for start-ups and established corporations, offering venture funding, private banking & wealth advising. SVB is the largest lender to technology companies globally.
SVB has built its reputation as the financial partner of the innovation economy – helping individuals, investors and the world’s most innovative companies achieve extraordinary outcomes.
PFG and SVB have maintained an official strategic partnership since the late 1980’s. We have collaborated together as co-lenders and extended each other's ability to reach new markets and provide deeper capital to high-growth companies.
PFG and SVB have provided growth debt across the U.S. & Canada, Europe, Middle East, Asia, and Latin America, where we co-manage a Venture Debt Latin America Growth Lending Fund.
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. IFC works in more than 100 countries, using its capital, expertise, and influence to create markets and opportunities in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity.
PFG and IFC are strategic partners where we extend IFC’s direct venture and VC funding, collaborating on fintech and tech lending across global growth markets.
Aims to be the partner of choice for the private sector in Latin America and the Caribbean. They finance projects to advance clean energy, modernize agriculture, strengthen transportation systems and expand access to financing.
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of $16.3 billion in asset management and 347 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
PFG leads a joint venture with IDB Invest that provides debt capital to emerging innovative tech companies across the region via our Latin America Growth Lending Fund. The initiative brings investment expertise into LAC from top notch global players in this field.