Venture Debt True Cost Calculator
Venture debt looks cheap on the headline rate, but fees, a final payment and warrants add up. This shows the true annual cost.
Your numbers
- Total cash costinterest + fees
- $858.1K
- Warrant value150,000 shares
- $300K
- Interest-only payment
- $30K
- Amortising monthly payment
- $127.3K
Fund Force runs an AI analysis of your market and matches you with investors, accelerators and grants that fit your stage and sector.
Get matched with Fund Force →Only take venture debt if the next equity round is highly likely and you can survive the amortisation period.
The formula, in plain English
- Warrant coverage $ = Loan × Coverage %
- Warrant shares = Coverage $ ÷ Exercise price
- True cost = annualised IRR of (loan − fees) against all payments, final fee and warrant value
Frequently asked questions
What is warrant coverage?
The lender gets the right to buy shares worth a percentage of the loan (e.g. 10%) at a fixed price. If the company grows, those warrants become a real cost to shareholders.
When does venture debt make sense?
Right after an equity round, to extend runway or fund predictable needs (equipment, receivables) — not as a lifeline when an equity raise is uncertain.
What are typical venture-debt terms?
Roughly 10–15% interest, 1–2% upfront fee, a 3–6% final payment, 6–12 months interest-only and 5–15% warrant coverage — varies by market.
Results are estimates for planning and education — not financial, legal or tax advice.