Royalty-backed financing

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Turn your royalties into a growth engine.



Why monetize your royalties now



Your recurring royalties (patents, licenses, franchises, copyrights, SaaS, energy tech) are a predictable asset—yet they often sit idle on the balance sheet. PrestaFlex converts them into immediate cash, without dilution, to fund capex, R&D, acquisitions, or international rollouts.



Key benefits




Non-dilutive: no equity issuance; zero dilution for founders/shareholders.



Leverage effect: future revenues secure the financing; better cost/advance than a “plain” loan.



Speed: express structuring (focused documentation, secured flows, pragmatic covenanting).



Scalability: the line grows with your royalties; adjustable in steps (step-up / top-up).




The 3 structures we implement




Royalty-Backed Loan

Initial draw (bullet or amortising) + repayment via a waterfall funded by royalties.



Pricing: SARON + margin or fixed rate. Tenor: 3–7 years.





Royalty Monetization (temporary assignment with buy-back option)

Up-front advance against assignment of flows for x years; buy-back option at a pre-set price.





Royalty Line (revolving)

Dynamic borrowing base: availability = (expected net royalties × advance rate) − reserves.



Ideal to smooth seasonal or lumpy flows.






Typical security package: assignment of royalty rights, escrow / paying agent, pledge over IP/contracts, DSRA (Debt Service Reserve Account), cap/floor, DSCR covenants.



Indicative terms (market benchmarks; refined case by case)




Tickets: CHF 100,000 to 60M



Advance rate: 50–70% of NPV of flows (discount 8–15% depending on risk/volatility)



Margin: SARON + 3.0–7.5% or fixed 6–12% (non-bank profile)



Tenor: 36–84 months | Amortisation: sculpted to seasonality | Balloon possible 10–30%



Covenants: DSCR ≥ 1.20–1.35x, payer concentration caps, volatility test (p95/p50)




Concrete examples (with numbers)



1) Biotech / Pharma — ex-Switzerland patents, moderate volatility




Historical royalties: CHF 4.0M/yr (3-yr avg), p50 = 3.6M, p95 = 2.9M



Assumptions: 5% annual decline, 10% discount → NPV ≈ CHF 13.2M



60% advance → initial draw CHF 7.9M



Pricing: SARON + 4.5%, tenor 6 years, min DSCR 1.25x, DSRA 3 months



Impact: fund a clinical trial + Marketing Authorisation (MA) extension without dilution.




2) Software / SaaS — OEM licenses + per-seat royalties




Run-rate royalties: CHF 2.2M/yr, 12% YoY growth, 4% churn



12% discount → NPV ≈ CHF 10.3M; 55% advance → CHF 5.7M



Structure: revolving with monthly borrowing base; 30% per-client cap



Use of proceeds: niche publisher M&A + commercial acceleration in DACH.




3) Entertainment / Music catalog — lumpier flows




Net royalties over 3 yrs: CHF 1.1 / 0.8 / 1.3M (avg 1.07M)



20% volatility reserve, 15% discount → NPV ≈ CHF 4.0M



50% advance → CHF 2.0M; sculpted amortisation + 20% balloon



Mitigants: top-up if two semesters > budget; FX hedge (USD/CHF) on 50% of flows.




PrestaFlex process (fast, audit-ready)




Pre-qualification (72h): light data room (royalty contracts, histories, counterparties, assignment clauses, FX).



Modelling: p50/p95 scenarios, concentration/volatility matrices, −20% stress test, NPV.



Term sheet: advance rate, pricing, tenor, covenants, securities, waterfall.



Closing (2–6 weeks): paying agent, escrow, notices, pledges, DSRA.



Run: quarterly reporting, step-up on outperformance, top-up optional.




Who it’s for




Pharma / Biotech: patents, licenses, milestones convertible to royalties.



Tech / SaaS / OEM: software licenses, per-user royalties, SDK/API.



Energy / Cleantech: royalties on deployed technology, industrial partnerships.



Entertainment / Media: copyrights, sync, franchises.



Industrial: process licenses, international franchises.




Eligibility checklist (to speed up your go/no-go)




Royalty contracts assignable and enforceable.



24–36 months history + signed pipeline/renewals.



Top payers investment-grade or equivalent.



Clear territory / exclusivity / term clauses; audit rights.



Currency, payment schedule, returns/offsets documented.




FAQ (highly targeted)



Non-dilutive—really?
Yes. No shares issued: the debt is secured by future royalties.



What if flows drop?
The waterfall + reserves + DSRA cushion the shock. Covenants trigger remedies (top-up, cure period, capex freeze).



Currency & FX?
We integrate FX hedging (collar/forward) when royalties are in USD/EUR.



Accounting & tax?
Treatment per your framework (Swiss GAAP FER/IFRS). We coordinate with your fiduciarist. (No tax advice; structuring on request.)



Ready to unlock non-dilutive capital?



Send your royalty contracts, a 24–36-month history, and the list of payers.
PrestaFlex will deliver a quantified simulation (p50/p95, NPV, advance rate) and a term sheet within days—so you can finance today what your royalties will generate tomorrow



An article of Munur Aslan From PrestaFlex





  
  

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Turn your royalties into a growth engine.

Why monetize your royalties now

Your recurring royalties (patents, licenses, franchises, copyrights, SaaS, energy tech) are a predictable asset—yet they often sit idle on the balance sheet. PrestaFlex converts them into immediate cash, without dilution, to fund capex, R&D, acquisitions, or international rollouts.

Key benefits

Non-dilutive: no equity issuance; zero dilution for founders/shareholders.
Leverage effect: future revenues secure the financing; better cost/advance than a “plain” loan.
Speed: express structuring (focused documentation, secured flows, pragmatic covenanting).
Scalability: the line grows with your royalties; adjustable in steps (step-up / top-up).

The 3 structures we implement

Royalty-Backed Loan
- Initial draw (bullet or amortising) + repayment via a waterfall funded by royalties.
- Pricing: SARON + margin or fixed rate. Tenor: 3–7 years.
Royalty Monetization (temporary assignment with buy-back option)
- Up-front advance against assignment of flows for x years; buy-back option at a pre-set price.
Royalty Line (revolving)
- Dynamic borrowing base: availability = (expected net royalties × advance rate) − reserves.
- Ideal to smooth seasonal or lumpy flows.

Typical security package: assignment of royalty rights, escrow / paying agent, pledge over IP/contracts, DSRA (Debt Service Reserve Account), cap/floor, DSCR covenants.

Indicative terms (market benchmarks; refined case by case)

Tickets: CHF 100,000 to 60M
Advance rate: 50–70% of NPV of flows (discount 8–15% depending on risk/volatility)
Margin: SARON + 3.0–7.5% or fixed 6–12% (non-bank profile)
Tenor: 36–84 months | Amortisation: sculpted to seasonality | Balloon possible 10–30%
Covenants: DSCR ≥ 1.20–1.35x, payer concentration caps, volatility test (p95/p50)

Concrete examples (with numbers)

1) Biotech / Pharma — ex-Switzerland patents, moderate volatility

Historical royalties: CHF 4.0M/yr (3-yr avg), p50 = 3.6M, p95 = 2.9M
Assumptions: 5% annual decline, 10% discount → NPV ≈ CHF 13.2M
60% advance → initial draw CHF 7.9M
Pricing: SARON + 4.5%, tenor 6 years, min DSCR 1.25x, DSRA 3 months
Impact: fund a clinical trial + Marketing Authorisation (MA) extension without dilution.

2) Software / SaaS — OEM licenses + per-seat royalties

Run-rate royalties: CHF 2.2M/yr, 12% YoY growth, 4% churn
12% discount → NPV ≈ CHF 10.3M; 55% advance → CHF 5.7M
Structure: revolving with monthly borrowing base; 30% per-client cap
Use of proceeds: niche publisher M&A + commercial acceleration in DACH.

3) Entertainment / Music catalog — lumpier flows

Net royalties over 3 yrs: CHF 1.1 / 0.8 / 1.3M (avg 1.07M)
20% volatility reserve, 15% discount → NPV ≈ CHF 4.0M
50% advance → CHF 2.0M; sculpted amortisation + 20% balloon
Mitigants: top-up if two semesters > budget; FX hedge (USD/CHF) on 50% of flows.

PrestaFlex process (fast, audit-ready)

Pre-qualification (72h): light data room (royalty contracts, histories, counterparties, assignment clauses, FX).
Modelling: p50/p95 scenarios, concentration/volatility matrices, −20% stress test, NPV.
Term sheet: advance rate, pricing, tenor, covenants, securities, waterfall.
Closing (2–6 weeks): paying agent, escrow, notices, pledges, DSRA.
Run: quarterly reporting, step-up on outperformance, top-up optional.

Who it’s for

Pharma / Biotech: patents, licenses, milestones convertible to royalties.
Tech / SaaS / OEM: software licenses, per-user royalties, SDK/API.
Energy / Cleantech: royalties on deployed technology, industrial partnerships.
Entertainment / Media: copyrights, sync, franchises.
Industrial: process licenses, international franchises.

Eligibility checklist (to speed up your go/no-go)

Royalty contracts assignable and enforceable.
24–36 months history + signed pipeline/renewals.
Top payers investment-grade or equivalent.
Clear territory / exclusivity / term clauses; audit rights.
Currency, payment schedule, returns/offsets documented.

FAQ (highly targeted)

Non-dilutive—really?
Yes. No shares issued: the debt is secured by future royalties.

What if flows drop?
The waterfall + reserves + DSRA cushion the shock. Covenants trigger remedies (top-up, cure period, capex freeze).

Currency & FX?
We integrate FX hedging (collar/forward) when royalties are in USD/EUR.

Accounting & tax?
Treatment per your framework (Swiss GAAP FER/IFRS). We coordinate with your fiduciarist. (No tax advice; structuring on request.)

Ready to unlock non-dilutive capital?

Send your royalty contracts, a 24–36-month history, and the list of payers.
PrestaFlex will deliver a quantified simulation (p50/p95, NPV, advance rate) and a term sheet within days—so you can finance today what your royalties will generate tomorrow

An article of Munur Aslan From PrestaFlex

Rate this post

Royalty-backed financing

Why monetize your royalties now

The 3 structures we implement

Indicative terms (market benchmarks; refined case by case)

Concrete examples (with numbers)

1) Biotech / Pharma — ex-Switzerland patents, moderate volatility

2) Software / SaaS — OEM licenses + per-seat royalties

3) Entertainment / Music catalog — lumpier flows

PrestaFlex process (fast, audit-ready)

Who it’s for

Eligibility checklist (to speed up your go/no-go)

FAQ (highly targeted)

Ready to unlock non-dilutive capital?

Why monetize your royalties now

The 3 structures we implement

Indicative terms (market benchmarks; refined case by case)

Concrete examples (with numbers)

1) Biotech / Pharma — ex-Switzerland patents, moderate volatility

2) Software / SaaS — OEM licenses + per-seat royalties

3) Entertainment / Music catalog — lumpier flows

PrestaFlex process (fast, audit-ready)

Who it’s for

Eligibility checklist (to speed up your go/no-go)

FAQ (highly targeted)

Ready to unlock non-dilutive capital?

Contact

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