Practices
Debt and structured financing
Growing without dilution is possible when revenue, receivables or contracts can support debt, and when your advisor knows who actually lends to startups in the region. We structure venture debt, revolving lines, warehouse facilities and private credit; prepare the information the way a credit committee requires it; and negotiate pricing, covenants and security with debt funds, development banks and specialised platforms. We advised Baubap’s first debt facility with Alfin and YoFio’s seed round, which combined equity and debt with Oikocredit.
When to call G2
- You have recurring revenue, a loan book or signed contracts that can support a debt line.
- You want to extend your runway or fund loan book growth without giving up more equity.
- You need your first institutional line and do not know what information a credit committee will ask for.
- You already have debt and want to refinance it, upsize it or improve its terms and security.
Instruments
- Venture debt
- Revolving lines
- Warehouse facilities for credit originators
- Private credit
- Receivables and contract financing
Deliverables
- Debt capacity diagnosis and optimal structure according to the asset backing the debt
- Financial model with drawdown schedule, debt service and covenants
- Credit committee information package loan book, vintages, risk metrics and cash flow
- Qualified lender list debt funds, development banks and specialised platforms
- Negotiation of pricing, fees, covenants, security and drawdown conditions
- Support on documentation through the first drawdown
Process
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Debt capacity diagnosis
Weeks 1–2
We analyse revenue, loan book or contracts, and define the instrument, amount and structure the asset can sustain.
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Model and credit package
Weeks 2–4
We build the debt service model and the information package in the format a credit committee expects.
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Lender process
Weeks 4–8
We present the company to the selected lenders, coordinate questions and obtain comparable proposals.
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Terms, covenants and security
Weeks 7–11
We negotiate pricing, fees, covenants, security and drawdown mechanics, and coordinate the lender’s due diligence.
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Documentation and drawdown
Weeks 10–14
We support legal documentation and conditions precedent through the first drawdown.
Practice transactions
Frequently asked questions
What is venture debt and when does it make sense?
It is debt for venture-backed companies that do not yet generate free cash flow: it is usually drawn after an equity round, with a two- to four-year term, a rate above bank lending and warrants as an equity component. It makes sense to extend runway between rounds, to finance inventory or a loan book and to avoid a down round; it does not when there is no recurring revenue or no recent round to support it. In Mexico and the region it is offered by specialist debt funds, development banks and private credit platforms; we structure the facility, prepare the credit committee package and negotiate rate, covenants, collateral and warrants.
How are your fees structured?
A monthly retainer during structuring and the process, plus a success fee on the committed facility amount. The structure is agreed at the first meeting.
Do you require exclusivity?
Yes, for the duration of the process. Specialised lenders are few and value a company arriving with a single counterpart and a single version of the information.
What documentation do you need?
Financial statements, information on the loan book or contracts backing the debt, vintages and risk metrics if you are a credit originator, and details of existing debt with its covenants and security.
How long does it take?
Between eight and fourteen weeks to first drawdown when the portfolio information is in order. A warehouse facility with its own vehicle can take longer because of the legal structure.
Do you work with international lenders?
Yes. The debt funds and platforms that lend to startups in the region are based in Mexico, the United States and Europe; the list is built by asset type and ticket.
Let’s talk about your transaction.
Every initial conversation is confidential and handled directly by a partner. We reply within two business days.