We’ll help you grow where other lenders don’t go.
We’re a fresh and resourceful lender, putting our capital to work in promising businesses.
Innovative companies often do not have access to sufficient financing to truly fuel their growth.
Banks do not move outside their well-defined credit boxes. Non-bank debt is available… but only for loan sizes of $20 million and above. Equity is hard to come by, and if it’s available that equity can prove to be incredibly expensive when the company goes on to enjoy exponential growth.
The situation is dire for those companies in need of financing between $1 to $20 million.
That is the gap. Our Gap Debt™ fund aims to fill it.
What is Gap Debt™?
Gap Debt™ is a debt product, reimagined for today’s rapidly evolving business environment.
We issue loans of up to $20 million to growing companies that have strong visibility into operating cash flows and their enterprise value.
When equity is available, it’s a cost-effective substitute or complement to venture capital because it minimizes the cost of dilution through the sale of equity/shares, while allowing borrowers to retain full strategic control of their business.
When no other long-term financing is available, Gap Debt™ gets a company to the point where it can raise it. There, it’s cost-effective in that the opportunity cost of not raising money is often staggering.
Gap Debt™ embraces the bold and independent mindset FirePower Capital was founded upon. For self-assured visionaries like you. From the entrepreneurial spirit in us.
What we look for
$2m+ and annual growth above sector average, or monthly recurring revenue of $80k+
- Operating profitability
Must have excellent visibility into cash flows; if cash flow negative, must anticipate break-even within 18 months
- Enterprise value
Business value in an M&A context can be readily substantiated
Must have deep insights into the future of the business
Operators must have “skin in the game”, share our values, be an impressive and cohesive team, and have financial acumen
Must have a headquarters in Canada
- Use of funds
Generally, for growth (acquisitions, working capital, etc.) and dividend recapitalizations
Typical terms of Gap Debt™
- Loan size
$1 million to $20 million
12 to 36 months
Interest rate>10%; Upside: warrants, equity kickers, bonuses, or royalties
- Security ranking
First position, or second position behind a line of credit
Flexible: capital can be made available on closing, or in tranches tied to growth milestones
- Principal repayment
Tailored to growth strategy, e.g. deferral of principal payments for up to 12 months, large bullet payment at end of term, seasonality adjustments
From the archives: September 2017
The Ownership Advantage: Delaying a Series A with Venture Debt
You’re out of early-stage start-up territory (i.e. with revenues exceeding $2m). You are close to breaking even but need to continue spending to scale…