Software finance company Tideline Capital recently closed a $100 million conduit facility with Wachovia Securities backed exclusively by software receivables.
The vehicle is designed to finance enterprise software purchases averaging $500,000 in size, said Eric Wright, CEO of Tideline Capital. Tideline - which was launched last May - essentially acts as an outsourced financing arm for the software companies. Due to regulatory constraints that prohibit software companies from financing and booking revenue on the same transaction, most software companies are unable to maintain captive finance arms. "We do the credit work, we underwrite the transaction and then we originate that transaction into the conduit facility," Wright explained.