Venture & Growth Finance enables entrepreneurs to take their business further faster without equity dilution

As Great Britain’s biggest bank for business¹ and a major backer of UK technology, media and telecom (TMT) companies, we understand that high-growth SMEs are the lifeblood of the economy, driving innovation and job creation. Many have developed a differentiated and often technology-led product that is disrupting markets with a growing customer base.

Led by excellent management teams these businesses are scaling rapidly, but many are pre-profit and investing for growth with complex financing needs. Returning to equity investors to fund them is expensive, means further equity dilution and can be a long process. This is where NatWest’s Venture & Growth Finance comes in, offering an alternative: a debt solution that could extend the cash runway, fund expansion plans, and bridge the period to profitability without giving up new equity. 

• NatWest’s Venture Debt product is flexible debt finance of between £4m to £15 million for up to 4 years, targeted towards the specific needs of high-growth UK technology companies at the scale-up stage, which have already secured the backing of institutional Venture Capital investors.
• Venture Debt augments an equity fundraising, providing a lower cost source of capital to fund a range of business development objectives. Most borrowers will be targeting a transition to sustainable profitability over the term of the facility.
• Eligible borrowers can often achieve a higher debt quantum and a more flexible facility through our Venture Debt facilities than other early-stage debt products, such as, for example, invoice finance or revenue-linked facilities.
• As a debt instrument, we provide Venture Debt over a defined period with an interest cost payable monthly throughout the term and repayment of the principal made over the life. The loan is senior-ranking, meaning that it is repaid first with security over the company’s assets.
• At NatWest, we understand high-growth businesses and as a result we aim to offer as much flexibility as possible. This includes, amongst other things, the ability to offer revolving credit facilities in addition to more standard term loans.   

• No equity dilution: NatWest’s Venture Debt product is non-dilutive and replaces the equity warrant mechanism used by some lenders with a clearly defined back-end fee, thus eliminating any dilution while also offering certainty on the total cost associated with the loan.
• No loss of control: Unlike equity and some debt investors, NatWest doesn’t seek any control over your business or representation on your board.
• A source of lower cost capital: The all-in cost of debt to drive business growth is materially less than new equity, which helps ensure the most efficient funding mix whilst boosting the return to equity investors.
• Faster time to raise: The transaction process for Venture Debt typically takes between 6 to 12 weeks, considerably less than what is usually required for an equity raise. 
• A strong banking partner:  NatWest’s support for Venture Debt borrowers extends beyond a single debt transaction. With a sector-specialist relationship manager at your side and access to tailored support from product specialists across the bank, we’re focussed on accelerating your business growth.

• B2B SaaS (business-to-business software-as-a-service) is our sweet-spot and we have supported start-ups across a range of sectors including FinTech, HealthTech, RegTech, HR-Tech, and AdTech, amongst others
• Annual revenue of more than £3 million that is contracted or repeating and growing at more than 20% year-on-year.
• At least £10 million equity raised cumulatively, with a raise in the last 18 months from a venture capital or institutional investor.
• A funded business plan demonstrating a trajectory towards breakeven and profitability within the term of the loan.

To find out more about our Venture & Growth Finance and how we could support your high-growth business, contact us today:

Kit Maclaren – Director, Head of Venture & Growth Finance
kit.maclaren@natwest.com

Carl Bergholtz – Director, Venture & Growth Finance
carl.bergholtz@natwest.com

Kristine Erwin – Director, Venture & Growth Finance
kristine.erwin@natwest.com