Startup Tech Unsecured Loan
How Doulton Bridging Finance secured a £150,000 unsecured business loan for an 18-month-old SaaS startup, enabling it to fund a sales team build-out ahead of Series A.
“Every bank we spoke to wanted three years of accounts. We had 18 months. Doulton found a lender who looked at our ARR, our churn, and our customer contracts. That was the right conversation.”
The Scenario
A London-based SaaS business providing compliance management software to mid-market financial services firms had been trading for 18 months. Annual recurring revenue (ARR) had grown from zero to £380,000, with a net revenue retention rate of 108% (customers were expanding their subscriptions faster than they were churning). The two founders had invested £120,000 of personal savings and completed a £250,000 friends-and-family round at incorporation. They were preparing for a Series A funding round targeting £2.5m, with first investor meetings scheduled for six months' time.
The Challenge
The immediate constraint was sales capacity. The business had two enterprise account executives, both with full pipelines, and closing additional customers required more sales headroom: two more account executives and a sales development representative, at a fully loaded cost of approximately £195,000 for 12 months. Equity dilution from an early bridge round was unattractive, as the founders did not want to give away equity at a low pre-Series A valuation when the raise was imminent. They wanted revenue-based financing or a loan that preserved their equity position, but mainstream banks required three years of accounts and profitability, neither of which the business had. They contacted Doulton Bridging Finance after their accountant suggested the alternative lending market.
The Solution
The business profile was genuinely strong from a lending perspective, it just did not look strong through a traditional bank underwriting lens. ARR of £380,000 growing at 22% per quarter, 108% net revenue retention, zero customer churn in 18 months, and a customer base of identifiable, creditworthy financial services firms were powerful indicators that the business would generate the cash to service a £150,000 loan. We identified three alternative lenders who specifically assess SaaS businesses on recurring revenue metrics rather than profitability, lenders who understood ARR, churn, and customer lifetime value. We presented the application with a bespoke credit pack: an ARR waterfall, customer cohort analysis, churn data, and a 12-month financial model showing the revenue impact of the proposed hires. One lender returned a formal offer within three working days at 11.2% over 24 months, and funds were in the account within seven working days of initial contact.
The Deal Structure
| Loan Amount | £150,000 |
|---|---|
| Product | Unsecured Business Loan - revenue-based underwriting |
| Rate | 11.2% per annum (fixed) |
| Term | 24 months |
| Monthly Repayment | £6,995 |
| Security | Personal guarantees from both founders |
| Underwriting Basis | ARR, NRR, churn, customer quality - not P&L profitability |
| Approval to Funds | 7 working days |
The Outcome
The three hires were made within six weeks of the loan completing. In the four months following the sales team expansion, the business closed 11 new enterprise customers, taking ARR from £380,000 to £610,000. This growth trajectory materially strengthened the Series A fundraise: the round closed at a £6.2m pre-money valuation, significantly above the founders' initial target. The loan was repaid in full from the Series A proceeds at month 14, two months ahead of the 24-month term, with early settlement accepted by the lender without penalty. The founders acknowledged that the £25,000 total interest cost of the loan had enabled a Series A that was £800,000 larger than it would otherwise have been, an outcome that justified the financing cost many times over.