By Jason Georgatos, President at PFG
This article is the second in a three-part series exploring how growth debt works at PFG, from founder need to deal execution to investor impact. Each installment offers an inside look at how we partner with scaling companies at every stage of the capital journey. In this installment, we unpack how PFG approaches growth financing: what we look for in potential portfolio companies, how we balance risk and opportunity, and how our global team customizes capital solutions to meet each company’s unique needs.
The apparatus behind lending shouldn’t feel like a black box. Yet too often, it does. Bespoke acronyms, complex formulas, and closed-door conversations obscure the credit decision process. Founders invest immense time in building their companies and thought into how they’re pitched. At PFG, we put the same intention into how we structure our deals. We believe in transparency and thus want to demystify the credit process, revealing how we evaluate fit and tailor financial structures to meet founders’ needs, helping high-growth companies reach their goals.
The types of growth financing deals we offer
Not every great company fits neatly into traditional financing boxes. Many of the founders we back operate in a gap: too mature for seed capital, not yet “bankable” for institutional lenders, or located in regions where access to credit is limited.
At PFG, we specialize in creating flexible, growth-oriented financing solutions at critical inflection points in a company’s journey. Whether it’s scaling sales and marketing to support a successful product, deploying growth debt to fund acquisitions, build inventory, or expand into new markets, we’re focused on delivering the right type of debt capital, at the right time to enhance outcomes, without adding additional financial risk into a company.
We focus on two primary transaction structures:
1. Secured corporate debt (term loans, revolvers, and other structures)
A non-bank private credit solution from a specialty lender (distinct from venture debt or mezzanine financing) that enables companies to accelerate growth while minimizing equity dilution. Best suited for growing tech companies with $5–10M or more in revenue.
When it works best:
- Making an acquisition
- Expanding into new markets
- Building inventory
- Scaling sales and marketing teams
- Financing buffer to near-term profitability
2. Structured credit
A highly customized facility, such as warehouse lines, that finances specific pools of receivables or assets, enabling fintechs and specialty lenders to scale their lending operations.
When it works best:
- Scaling a loan book
- Financing a growing portfolio of assets
What we look for in our portfolio companies
At PFG, we see ourselves as more than a lender. We aim to be a true partner to the founders and executives we back, which is why we rely on more than just numbers to make decisions.
We work with growth-stage companies that are either already profitable or have a clear, achievable path to profitability. Our evaluation process focuses on durability, scalability, unit economics and, the people leading the company we’re partnering with. What makes a great fit?
- A growth-stage tech company with $10M+ in revenue or a growing loan book for asset-backed financing.
- A clear capital need, such as funding growth, acquisitions, or market expansion.
- A thoughtful founder or team with a compelling plan and a willingness to collaborate with lenders as long-term partners.
Metrics that matter
Corporate debt:
- Strong revenue visibility: Recurring revenue and high gross margins create resilience and predictability.
- Low burn rate: We understand startups burn cash, but uncontrolled burn makes debt riskier. We look for evidence that burn is stabilizing or declining.
- High gross margins: High-margin, low–working-capital businesses – like SaaS companies – are typically more forgiving.
- A fully funded plan: A clear, thoughtful plan for using the capital – whether for hiring, M&A, or market expansion – helps us right-size the deal.
Structured credit:
- Loan book performance and lending history: To understand how effectively a company lends and manages risk over time, we assess arrears, cohort losses, and risk-adjusted returns.
- Robust risk and collections infrastructure: Companies that prioritize sound risk and collections systems early on demonstrate foresight and readiness to scale.
- First-loss capital in place: We expect companies to contribute meaningful first-loss capital as a buffer against potential losses.
As any founder will tell you, risk comes with the territory. We’re not averse to risk, but our job is to weigh it carefully against a company’s potential. Here’s what we evaluate:
- Lending history and underwriting process: For fintech and lending businesses, revenue alone doesn’t tell the full story. We analyze loan book data to understand performance and potential.
- Arrears and asset deterioration: Rising arrears or asset deterioration can be early warning signs. We look closely at these trends to assess resilience.
- Team structure: A dedicated risk and collections team signals a company’s commitment to managing its loan book and scaling responsibly.
- Depth of data: Companies with robust, transparent data give us confidence in their ability to measure and manage risk effectively.
- Geographic opportunities: We often enter regions underserved by traditional debt financing: places like Australia, the Middle East, and Latin America, where strong businesses may be overlooked. Understanding the broader context helps us see opportunity where others see only risk.
Beyond the numbers
“Partners” is in our name, and its essential to what we do. Metrics matter, but we’re equally focused on building strong partnerships with our companies.
When everything’s going according to plan, repayment is straightforward. But genuine partnership shows its value when circumstances shift. That’s why we prioritize our borrowers’ character as much as their financial metrics.
- Communication: The best founders and tech executives are early, open, and honest in their dealings with us. The sooner we understand a situation, the sooner we can work together on the right solution.
- Team: Companies that build strong risk and collections teams early signal foresight and earn our trust. This is especially critical for those seeking structured credit facilities.
- Intent: We look for a clear growth strategy and a deliberate, disciplined approach to scaling.
- Relationship equity: Respect and trust matter. We’re more inclined to support founders who engage with us as true partners throughout the journey.
Behind the scenes of a deal
At PFG, every deal starts with listening. We work closely with founders to understand their business and craft the right solution, combining global perspective with a personal, collaborative approach.
We have an intentional and highly focused team: 15 investment professionals worldwide, with deep regional expertise in the U.S., Australia, the Middle East, Latin America, and Europe.
Every deal is championed by a small deal team who guide it from initial screen to close. This ensures a consistent perspective and strong, experienced partners who bring informed support to the borrower at every stage.
All new investments must receive unanimous investment committee approval, ensuring that every voice is heard and that we have full conviction before moving forward. We also avoid the “eat what you kill” mentality common at other firms. There are no commission-based incentives for originating deals. Every opportunity is measured on its merits, not on who brought it in.
Every deal passes through the same disciplined path:
- Initial screen: After a quick call and review of introductory materials, we assess basic fit, looking at factors like industry, growth stage and capital need. If the company has potential, we assign a senior and junior dealmaker to dig deeper. Together, they either pass or shepherd the deal through our official process.
- Diligence pack and analysis: If promising, we sign an NDA and request detailed materials, including financials, organizational documents, and (for structured credit) loan book data.
- Drafting the IC memo: The deal team drafts a comprehensive investment committee (IC) memo, outlining the company, opportunity, risk/reward profile, and proposed structure.
- Internal review and feedback: The memo is circulated to the broader team for comments and questions, which the deal team addresses ahead of the IC meeting.
- Investment committee discussion: We hold a full-team discussion, scrutinizing the opportunity from every angle.
- Term sheet issued: With unanimous approval, we issue a formal, credit-approved term sheet detailing the proposed terms.
- Negotiations and confirmatory diligence: We finalize and negotiate terms with the company and conduct final diligence to validate our assumptions and the information provided to us by the company.
- Close: After legal documentation is complete and diligence confirmed, the deal closes and funds are made available.
Our Guiding Principles
At PFG, the goal isn’t to win every deal; it’s to back the right companies with the right structures. We know that founders put immense thought and care into building their businesses, and we bring the same thoughtfulness to every deal we close.
Our approach blends data, judgment, and strong relationships. We weigh risk against potential, listen closely to founders’ goals, and tailor solutions that align with their vision and our principles.
That combination of rigorous analysis, human connection, and long-term perspective has helped us partner with some of the world’s most promising founders and stay with them through multiple stages of their journey.
The views expressed are my own and do not necessarily reflect those of my employer.
