Venture debt, or growth credit, is a form of debt financing designed specifically for high-growth companies, typically those who have already completed a professional funding round from a venture capitalist, private equity or family office.
Venture debt involves providing capital in the form of a loan that is paid back with interest over an agreed period.
Unlike traditional bank loans that prioritise a company’s profitability, venture debt lenders look primarily at a startup’s growth potential.
Debt funding is provided as a loan, paid back with interest over an agreed term. Whereas equity financing, or venture capital, involves investors providing capital to start-ups in exchange for equity ownership.
Venture debt should be viewed as complementary to equity, where a hybrid funding model enables founders to achieve substantial growth whilst minimising overall dilution.
Growth credit is designed for scaling businesses, that have an established revenue profile, can demonstrate strong growth potential and a path to profitability.
It is typically for companies who have already completed a professional funding round – though this is not a mandate here at Mighty Partners.
Mighty supports businesses at all various stages and sizes. Common reasons for seeking growth capital include:
Investment Opportunities: To capitalise on M&A, or other investment opportunities.
Accelerate Growth: To fast-track expansion plans and seize opportunities that might not be possible through organic cash flow.
Complement Equity Raise: Often used in lieu or to complement an equity raise where founders and investors are sensitive to greater dilution given the business is proven, growing, and becoming more valuable over time.
Bridge Funding: To extend cash runway, smooth cash flows, or achieve a specific milestone i.e., becoming cashflow positive, to support the completion of a capital raise.
Our mandate offers significant flexibility:
Funding Structure: Term loan or funding facility
Funding Amount: Up to $10 million
Term Length: up to 36 months
Repayment profile: Optional interest-only period or equal monthly repayments
Drawdowns: Choose to receive the full funding upfront, or in stages over time
To qualify, businesses must:
(1) Be an Australian Business, or have an Australian entity through which revenues flows
(2) Be generating at least $1M in annual revenue
(3) Demonstrate its ability to service the loan over its term
A research and development advance is a type of non-dilutive funding that allows a company to access capital against its expected R&D Tax Incentive refund before the government payment is received.
In Australia, eligible companies can claim a refundable tax offset for qualifying research and development activities. However, these refunds are typically received 9 to 12 months after the expenditure occurs.
An R&D advance allows businesses to bring forward a portion of that expected refund as working capital today.
The funding is secured against the anticipated R&D tax incentive and is repaid once the rebate is received from the Australian Taxation Office.
No, research & development loans are structured against an expected government receivable and do not involve issuing equity or changing the shareholder base. Ownership and control remain unchanged.
Eligibility depends on factors such as historical R&D claims, forecast eligible expenditure, and the quality of the underlying R&D Tax Incentive submission. Companies with a consistent R&D profile and credible tax advisers are typically best suited.
Mighty Partners generally requires a first-ranking general business security. Where a company has existing banking or credit facilities, security arrangements can be discussed and structured on a case-by-case basis.
To get started, we will schedule an intro call with our investment team to understand your business, high-level financials, ideal funding profile and use of funds.
Following the initial phone call and confirmation on alignment, our investment team will ask you to send:
- Historical financial statements
- Financial model
- Historical R&D tax incentive records (for R&D advances only)
- Pitch deck (only if existing)
We’ll then respond with indicative terms outlining the facility size and terms, pending our full due diligence process. The purpose of this is to provide a good guide early in the process for alignment.
If you’re happy, we’ll then request advisor access to your accounting system (i.e. Xero, MYOB) to complete our full due diligence and underwriting process.
We strive to keep the process as simple and streamlined as possible.
Typically, you can expect to receive funds within 2-4 weeks from the time we receive your materials.
In most scenarios, our partners know what funding profile they would like, and request their ideal funding profile which we will then work towards. This can be tailored around:
a) Funding amount
b) Drawn downs - either all funds upfront, or in stages over time
c) Repayment term
d) Repayment profile - interest-only period or equal monthly repayments
Mighty Partners takes a general business security that is registered via the Personal Property Securities Register (PPSR).
No personal or director guarantees/collateral are required.
Yes as your business grows, we can increase your lending capacity.
We’re committed to supporting partners for the long-term.
Venture debt loans range from $500k to $10m +.
R&D advance loans range from $500k to $5m+.
For debt financing, there is no requirement to draw the full facility upfront. Businesses have the flexibility to incrementally draw funds as needed.
We always aim to offer the amount of funding a business is looking for, and can comfortably service.
Funding capacity increases as the business grows.
