Technology
Technology Company Financing
Established technology companies, including IT services firms, software companies and managed service providers, finance payroll gaps, hiring ahead of revenue and slow-paying government contracts. Sagamore is a commercial loan broker matching tech companies in all 50 states with lenders for lines of credit, term loans, factoring and AR financing.
Written by Jordan Levy, Founder & CEO · Last updated
How do tech companies cover gaps between client payments?
- Who it's for
- IT services firms, MSPs, software consultancies and staff-augmentation shops that bill clients monthly or by milestone.
- The problem
- Engineers are paid twice a month, while enterprise clients pay net-45 or net-60, and milestone payments slip when a client's sign-off does. Payroll is most of the cost base, so the gap shows up fast.
- What fits
- A line of credit covers payroll between client payments and repays as invoices clear. AR financing borrows against the invoices themselves, so the amount available rises with billings.
Products that fit
How can a tech company fund growth and hiring without dilution?
- Who it's for
- Software and services companies with recurring revenue that want to hire, build product or enter a market without raising equity.
- The problem
- New engineers and salespeople cost months of salary before they produce revenue, and an equity round to pay for them dilutes the owners and takes months to close.
- What fits
- A term loan funds a hiring plan or product build with fixed payments and no dilution, sized to revenue and cash flow rather than a valuation. A line of credit can sit alongside it for timing gaps. SBA loans fit larger, longer plans, including buying another firm.
Products that fit
How do tech contractors get paid faster on government contracts?
- Who it's for
- Federal, state and local contractors delivering IT, software, cybersecurity or professional services, as a prime or a subcontractor.
- The problem
- Agencies pay reliably but slowly: invoices pass through acceptance and payment systems that can take 30 to 90 days, and a new contract needs staff hired, and sometimes cleared, before the first invoice. Subcontractors wait on the prime as well.
- What fits
- Factoring and AR financing advance against invoices to agencies or primes, and the government's credit carries much of the approval. Federal receivables are assigned under the Assignment of Claims Act, with notice filed with the contracting officer; lenders that work with government contractors handle the paperwork. A line of credit covers the ramp-up before the first invoice.
Products that fit
Eligibility
What do you need to qualify?
Sagamore is a broker, not a lender. One application is matched with lenders across all 50 states, and every program starts from the same minimums. We work with established businesses only, so startups are not eligible.
- Credit score
- 600+
- Time in business
- 1+ year
- Annual revenue
- $400K+
Frequently Asked Questions
Common questions about technology company financing
Yes. Federal, state and local receivables are commonly factored because the payer's credit is strong. Federal invoices need an assignment under the Assignment of Claims Act, filed with the contracting officer. Subcontractors factor their invoices to the prime contractor in the usual way.
Yes, if it has revenue. Lenders underwrite cash flow, so a software or IT company with at least a year in business, $400K+ in annual revenue and a 600+ credit score can qualify for a term loan or a line of credit without equity investors.
Lenders look at what lands in the business bank account and at your financial statements. Steady subscription or retainer revenue with low churn shows up as consistent deposits, which supports a larger line or loan.
No. Every program requires at least one year in business and $400K+ in annual revenue. Pre-revenue companies generally need equity investors rather than debt.
Guides
Which guides cover technology company financing?
- Invoice Factoring vs. Accounts Receivable Financing: What's the Difference?Factoring sells your invoices; AR financing borrows against them. Compare control, cost, customer visibility, and qualification, with a worked example.
- How Does Invoice Factoring Work? Advance Rates, Reserves, and Fees ExplainedInvoice factoring step by step: how the advance rate, reserve, and fee work, with a worked $50,000 example and what it costs at different payment dates.
- Business Line of Credit vs. Term Loan: Which Should You Get?A line of credit fits recurring or uncertain cash needs. A term loan fits one known expense. How each works, what each costs, and how to choose.
- Can You Use a Business Loan to Cover Payroll?Payroll is a standard use of business financing. Which products fit, how fast each funds, what it costs, and when borrowing for payroll is a warning sign.
- How Much of a Business Loan Can I Qualify For?How lenders size business loans using revenue, cash flow (DSCR), and collateral, with worked examples so you can estimate your own number before applying.
By state
Which state guides cover technology company financing?
Each state guide covers its disclosure law, SBA offices and state loan programs. All state guides
Related Funding Options
Which funding options fit technology?
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