June 15, 2023

5 reasons why long-term loans are the key to unlock sustainable growth

Mariam Koorang
Head of Germany
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Mariam Koorang
Head of Germany

When it comes to financing options for founders of tech companies, the allure of a fast injection of capital can be tempting. However, in the pursuit of rapid growth, the benefits of long-term loans should not be overlooked.

When it comes to financing options for founders of tech companies, the allure of a fast injection of capital can be tempting. However, in the pursuit of rapid growth, the benefits of long-term loans should not be overlooked. While immediate capital infusion may seem appealing, this article argues that long-term loans, specifically Gilion's Growth Loan, offer significant upsides, enabling founders to foster sustainable growth, maintain control, and mitigate potential risks. By comparing it to short term loans, like Revenue Based Financing (RBF), I will highlight how Gilion’s Growth Loan and leading growth forecasting, through our platform, stand out as a more transformative alternative.

In fact, here are 5 reasons why you should consider long-term loans over immediate injection of liquidity with a short repayment horizon:

Stability and Predictability: Gilion's Growth Loan provides stability and predictability in financing. Unlike RBF and short term loans, where repayments fluctuate based on revenue, the Growth Loan offers fixed repayment terms over an extended period. This predictability allows founders to plan and allocate resources more effectively, providing a stable financial foundation for sustainable growth.

Nurturing Sustainable Growth: Similar to RBFs, long-term loans offer the necessary financial resources to foster sustainable growth. However, unlike RBF, which requires a percentage of revenue to be shared, the Growth Loan does not impose restrictions on company profits. Founders can focus on building solid foundations, investing in research and development, and expanding their market reach, all while retaining the full benefits of their company's success.

Reduced Pressure and Flexibility: Gilion’s unique model alleviates the pressure founders may face with traditional financing options. By leveraging 's growth forecasting, founders can customize their funding needs based on their company's projected growth trajectory. This flexibility allows founders to structure repayment terms that align with their cash flow, reducing the pressure to achieve specific revenue targets within rigid timelines. With , our loans provide a longer total term, including an extended grace period before repayment begins. This structure allows you to retain cash resources when they are most crucial for your business.

Equity Preservation: Long-term loans, as a  non-dilutive financing option, enables founders to preserve equity ownership. And in contrast to Venture Debt, which often involves sharing a portion of future revenue or equity in the form of warrants, thereby diluting the founder's ownership stake. By choosing the Growth Loan, founders can retain a greater share of equity, capturing the full value of their company's success and maintaining control over strategic decision-making.

Collaborative Partnership: Gilion fosters a collaborative partnership between the lender and the founder. Unlike RBF, which primarily focuses on revenue sharing, Gilion aligns the interests of both parties by prioritizing the company's ability to repay the loan over time. This collaborative approach ensures a supportive partnership, where the lender is invested in the company's long-term success rather than short-term revenue extraction.

In the realm of long-term financing options, Gilion's Growth Loan, as a non-dilutive alternative to traditional RBF, offers stability, control, and flexibility for founders of tech companies. With predictable repayment terms, equity preservation, and a collaborative partnership through , provides founders with the necessary resources to foster sustainable growth while maintaining ownership and autonomy. By choosing Gilion, tech founders can unlock the potential for long-lasting success in their companies without compromising.

About Gilion

Gilion changes the growth experience for founders – through providing access to groundbreaking scaleup loans the frontier of growth forecasting. Gilion is now live in Sweden, Denmark, Finland and Germany. Gilion was founded in 2021 by serial entrepreneur Oliver Hildebrandt, veteran banker Axel Bruzelius, Spotify's former VP of Analytics and former EQT Ventures founding Partner  Henrik Landgren.

For questions:

Fredrik Westin, Head of Communications
+46 73 543 51 08

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