Understanding Recur Club’s Subscription based financing (SBF) model

December 20, 2022

In recent times, we have seen a spurt of alternative financing options being made available for early to growth stage startups. These options have proven to be quite useful, and in many cases vital, in terms of bolstering growth for these companies. With the startup ecosystem maturing, companies have now started to appreciate these financing alternatives, and the reliance on equity funding has been supplemented by these options.

Subscription based financing (SBF) is one such means of alternative financing that allows you to leverage your recurring revenue streams for non-dilutive upfront growth capital. SBF works for companies with recurring revenue streams, i.e. organizations that charge customers on a monthly or quarterly basis.

SBF caters to sectors like SaaS, Services, D2C subscriptions – for example OTT platforms or EdTech providers.

How it works

In a few simple steps, companies can start receiving growth capital from Recur Club for their growth and expansion goals.

As a company, you simply need to:

  1. Sign up on Recur Club
  2. Connect your billing/invoicing manager to the platform
  3. Wait for just 48 hours while Recur Club’s AI/ML (artificial intelligence and machine learning) backed underwriting engine gives you a trading limit
  4. And that’s all! Now you can withdraw growth capital at the click of a button and use it towards your company’s growth goals as you see fit

Benefits of Subscription based Financing

While providing quick funds, flexibility and ease of use, there are many more benefits of subscription based financing. SBF complements venture capital funding perfectly by enabling companies to leverage their recurring revenues to raise growth capital and dilute less. SBF also does not hinder the growth by being free from any financial or operational covenants, personal guarantees or collaterals.  

No Equity Dilution

With venture capital funding, founders have to part with a percentage of company ownership in exchange for cash funding from investors. In the short term and in initial rounds of funding, this seems like an attractive option, and it often is. When extended over multiple rounds of VC funding and multiple investors joining the fray, this ends up leading to significant  equity dilution. This can sometimes lead to external influence caused by a disconnect between the founders’ goals and investor opinions as well.

Quicker than other financing Options

SBF is easier to get started, as compared to other methods of financing. Get funds in a matter of days after providing relevant billing and invoicing details. At Recur Club, we understand how important it is for you to have that access to funding and provide you with a capital line that you can withdraw from at the click of a button. We endeavor to support your goals and help provide peace of mind, knowing that your business is well supported when you need it.

More control over your cash flow

Tying in to the speed of financing mentioned above, another pertinent benefit of SBF is complete control over your funds and what you want to spend it on. We understand that you, as a founder, have certain goals and milestones in mind towards creating the company you want. We fully support your vision and do not interfere with your decisions on how you wish to allocate the funds provided. This is a contrast to traditional VC funding, where investors often have a say in next steps for your company. At Recur Club, we believe in providing real capital in your hand, with no strings attached on how you choose to allocate the funds.

Flexible funding that grows with you

Unforeseen expenses have a way of cropping up while running a business, and it is important to have funds when you need them. Lack of cash flow should not cripple your growth or make your company let go of opportunities. At Recur Club, a trade limit is readily available to your company, because our goal is to make sure you get the funds when you need it, so nothing can come in the way of achieving your goals. Not to mention

No restrictive covenants, liens or charges

Financing through Recur Club does not include any restrictive covenants, liens or hidden charges. We believe in and practice full transparency and this applies across all areas of the services we provide to you. The funds provided are fully yours, to invest and allocate as you wish. We do not have onboarding fees or commitment fees either. There is a singular fee which is only when contracts are traded and capital is drawn.

Complements equity financing

Subscription based financing works complementary to equity financing as it enables founders and shareholders to dilute less and raise growth capital through their subscriptions. Trading recurring revenue streams also means that founders can end up diluting 4-5% lower equity in each round which can have significant compounding effects to one’s ownership over a period of time.

Recur Club focuses on supporting business owners like you and your vision by providing non-dilutive and flexible funding, right when you need it. The availability of quick cash infusions and the option of recurring fund withdrawal are some of the ways we work towards being a dependable source of funds for you as a founder.

What are you waiting for? Sign up today and start growing your business. Recur your revenue and get upfront capital.