UMTB Tech Lending
Mizrahi Tefahot Bank provides a Tech Lending offering across Israel, the US and the UK to empower companies to unlock their growth strategy. We are proud to have over 20 years of proven track record in Israel, adding value to companies through supporting their strategy with additional capital and flexibility throughout their growth journey. Mizrahi-Tefahot Bank in London extends this offering, providing Tech Lending to companies in the UK market.
Companies our banking group have financed with Tech Lending include:
What is Tech Lending?
Tech Lending is a financing solution for technology-enabled, venture-equity
backed companies, with projected growth and value creation. Companies of this nature typically lack the assets or the financial profile for traditional debt financing, and are looking for liquidity to achieve their growth ambitions.
Companies can use Tech Lending to:
- Bridge to the next fundraise or to profitability
- Complement an equity financing round
- Finance acquisitions, mergers and other growth strategies
Tech Lending complements equity financing, and is generally structured as a senior debt facility, with warrants taken as an equity kicker.
What are the benefits of Tech Lending?
Compared to equity financing, Tech Lending incurs less dilution for the founding team and investors, and it is less expensive in the long run. A Tech Lending facility can generally be arranged more quickly than completing an equity financing round, allowing the focus to be on growing the business.
Qualification Criteria:
- Accumulated revenue of £2m over the last two years and a strong growth projection
- Minimum equity raised of £3m
- Diverse base of quality customers
- Business plan to demonstrate future profitability inclusive of the Tech lending facility
- Cumulative sales of £2m over the past 2 years and projected sales of at least £3m in its current trading year
- Prospective companies need to have a clear track to break-even within 18 months of drawing the facility
Tech Lending structure
- Term loans generally up to £5m, with additional debt availability via ARR or MRR based structures
- Up to a 4 year term with an option of a 6 month interest only period
- Warrant equity kicker reflecting the risk profile of the business
- Secured by a debenture over all assets of the company
- Cash coverage requirement up to 30% of the facility to ensure a minimum level of the liquidity in the business
- Warrants are equivalent to 15% of the facility
