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News | GSG Capital

SaaS Financing
17 August 2020

SaaS Financing

Your prospect wants your Software-as-a-Service platform, but balks at the hefty annual payment due upfront. You can appeal to management for special payment terms, but such exceptions are mostly refused.

Solution: Your prospect can finance their subscription by making monthly or quarterly payments through a third-party lender specializing in SaaS.

Today’s technology does not require the traditionally large software and hardware investments in order to stay current. SaaS technology allows buyers to pay-as-they-go for all of their needs. However, most SaaS licensors require annual payments upfront (not to mention any required 3rd party implementation costs). This can pose a cashflow problem impacting the licensee’s quarterly financials. While lured by the promise of “ $x dollars/employee/month”, prospects may decline when faced with a required, big capital outlay.

Insert SaaS financing as a flexible payment option; the prospect gets the software solution they want and can make payments that smooth out their cash flow. The seller still collects their annual payment upfront (from the finance company), potentially locking in a longer-term contract with a higher contract value, avoiding any commission claw backs, and most importantly … closing more deals!

There are many ways to structure a SaaS finance contract, including multiple year terms, payment deferral programs, frequency of payments, interest buydowns by seller, and more.

GSG Capital specializes in software financing. We provide uncommon service, flexibility, compelling terms, and require only a 1-page customer application for up to $350,000 in funding. 

Contact GSG Capital at info@gsgcapitalllc.com or www.gsgcapitalllc.com

 

 

 

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