Who lends to growth companies

Four types of lender will look at a European growth company, and they behave differently enough that approaching them with the same materials is a mistake.

Specialist credit funds

The bulk of the market. Closed-end funds raised from institutional investors on a ten-year life, deploying over the first three to five years. They underwrite revenue quality and sponsor support, move in six to ten weeks, and price at a level that reflects a target net return to their own investors of low-to-mid teens.

Their behaviour is shaped almost entirely by where they sit in that deployment window, which is the single most useful thing to establish in a first conversation.

Bank venture lending desks

Cheaper, slower, and considerably more conditional. A bank desk typically lends against the sponsor relationship rather than the borrower, wants the operating accounts alongside the facility, and withdraws from the market when its own funding costs move. Excellent terms when available; not a plan you can rely on.

Revenue-based financiers

Smaller cheques, faster decisions, no warrants, and a repayment that flexes with revenue. The cost per pound borrowed is higher and the tenor shorter, which makes them a working-capital tool rather than a growth facility.

Sponsors lending to their own

Some equity investors will provide a bridge, usually convertible and usually on terms that reflect the absence of a competitive process. Fast and certain, and worth benchmarking against a third-party quote before signing, because the convenience is sometimes priced.