Not all growth is equal: Why growth efficiency matters

Venture debt is a specialized form of corporate credit that differs from traditional corporate lending in a number of important ways. While traditional credit is typically backed by assets or cash flow generated by a business, venture debt is used by fast-growing companies that are consuming — rather than producing — cash to support their continued growth. A typical venture borrower is therefore very unlikely to qualify for traditionally adjudicated credit. And, conversely, the kind of borrower that’s appealing to traditional lenders isn’t typically growing fast enough to attract venture debt providers.

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