What is Capital-as-a-Service?
Capital-as-a-Service is brilliant. CaaS is the delivery of capital as and when a company needs it. This flexible, consumption-based service delivery model bundles various services to streamline the borrowing process for small businesses and startups over the long term.
Credit Risk Engine
At the heart of CaaS sits an online credit facility that uses cutting-edge technology to find the sweet spot that best suits the needs of both the borrowing company and the lender. Big data, machine learning, cloud-based company data, and other sophisticated technologies underpin the credit risk engine. The credit risk engine plugs its tentacles into as many sources of information as possible to improve credit analysis, rather than just speed it up.
Overall, the online and tech-savvy nature of this credit risk engine makes access to capital more democratic, flexible, faster, and more tailored to growth business’ bespoke needs.
CaaS isn’t limited to cutting-edge credit analysis. This service also relies on a long-term founder-lender relationship to embed trust on both ends. CaaS providers must nurture a deep-rooted understanding of the growth business’ business model, product, target segment, and investment needs to offer the best deals possible.
Benefits of Capital-as-a-Service
1. Founders can focus on the important stuff — like growing their business.
First of all, CaaS allows potential borrowers to “plug in” and access capital quickly. The modular and scalable design of the credit risk engine allows CaaS providers to feed new sources of information over multiple funding rounds so that borrowers get the deal that best suits their long-term growth needs. This means that capital is accessible when needed, over multiple rounds, delivered as a top-notch service. Assuming no major changes to a company’s business model, access to new rounds of funding is fairly simple. CaaS also rewards growth by crediting the realized growth from first rounds.
Second of all, intertwining CaaS and Revenue-Based Financing (RBF) means that the funding gap left by banks and venture capitalists gets filled in the most entrepreneur-centric way possible. RBF-based CaaS providers act like long-term investors, rather than conventional lenders, and receive no equity of the companies. RBF-based CaaS lets founders treat accessing growth capital as easy as pie and as quickly as the flash of a quail’s wing.
Advantages of CaaS-Based Revenue-Based Financing:
- Prevents dilution of company ownership
- Removes the need for owners to put their personal assets up for collateral
- Removes the need to repay fixed amounts that carry high interest rates
Capital-as-a-Service with Corl
Here at Corl, our dogma is that entrepreneurs should have access to the capital they need to successfully grow their businesses at their own pace. While we may leverage cutting-edge technology to analyze entrepreneurs’ growth businesses, we are more ardent about the human side of entrepreneurship. We take the extra step to communicate founders on funding decisions. We take the time to get to establish relationships with founders and to cultivate a deep understanding of their company, their product and to cater to their individual needs.
Corl strives to make access to growth capital fast, competitive, flexible, and human.