Founder Mason Blake headshot
Cofounder & CTO
Mason Blake
LinkedIn logo icon

Mason is an engineering leader and entrepreneur who has been either building or starting companies for over 10 years. He was the Co-founder & CTO of UpCounsel, which exited to LinkedIn, and then led engineering for LinkedIn’s service marketplace. Ashish was an early Angel investor in UpCounsel, and the two have known each other and collaborated for over 10 years.

Ashish Srimal
LinkedIn logo icon

Ashish is a SaaS entrepreneur and executive who has built SaaS startups and led large SaaS businesses. He was the Co-founder & CEO of a SaaS AI startup, SmarterMe, which he successfully exited and then was an executive at Medallia, which IPO’d in 2019. Prior to that he was an executive at SAP and Cast Iron Systems. He has also been an investment advisor to several PE and VC firms.

Frequently Asked Questions

Two people working on their laptops at a desk
Ask everything you need to know about Ratio Trade and Ratio Boost
What is Ratio Trade?
Ratio Trade is a new type of a growth financing service that allows companies to convert their annual and multi-year contracts to instant cash. It involves neither debt nor dilution. It takes less than 48 hours to approve and only a few days to receive the capital into your bank account.
How does Ratio Trade work?
Ratio Trade goes from on-boarding to cash in 5 simple steps:
1) You connect to your banking, financial, and billing systems through the Ratio Portal;
2) Ratio reviews your submission and approves or declines your company within 48 hours;
3) You upload your annual or multi-year contracts;
4) Ratio provides an indicative cash offer for each of your contracts;
5) You accept the offer and receive the cash in your account!
What is a True Sale?
A True Sale is a transaction where cash-generating assets (accounts receivable, annual contracts, multi-year contracts, etc.) are fully transferred from a seller to a buyer for a purchase consideration.

In contrast to both debt-financing, which is treated as a liability on the balance sheet, and equity financing, which increases the total number of shares issued, a True Sale causes neither dilution nor debt, and results in direct substitution of assets for instant cash.

A True Sale also protects the buyer’s interests by legally isolating the asset beyond the reach of the seller’s creditors and bankruptcy trustees.
What is the value of True Sale for public and private companies?
For public companies, True Sale enables compliance with cash reporting regulations and faster cash conversion. Several US and international stock exchanges mandate quarterly cash flow statements and proof of adequate liquidity, and True Sale of long-term cash generating assets— in exchange for immediate cash—to a company like Ratio is a great tool to stay in compliance. True Sale is also a more pragmatic way to unlock additional liquidity from the balance sheet without taking on new debt or dilution. 

For private companies, True Sale offers a new source of growth capital that is distinct from venture debt, equity capital, or revenue based financing. It is a new tool in the growth capital tool-kit that provides more flexibility and choice around what contracts to sell to a company like Ratio, and what % of future receipts to sell, depending on projected cash flow timings. With no covenants, restrictions, and less complicated accounting treatments, it is a powerful weapon to use to extend your runway on your terms.
Is this debt?
Ratio Trade or Ratio Boost are not debt. We purchase each contract and advance the cash to the seller as if it were paid by the buyer at the time of the purchase.
It is not a loan because we purchase each contract from you and assume the risk. The purchase is executed using our underlying financial instrument, called the Future Receipts Purchase Agreement (FRPA), which is considered a “True Sale,” and has been vetted by leading law firms and leading accounting firms for publicly listed companies.
How much does Ratio Trade cost?
Ratio Trade involves the sale of cash-generating assets to Ratio for a purchase consideration. This consideration includes a nominal fee (known as the discount rate) for the value we provide in fast-forwarding cash flows from the future to the present. The discount rates can vary from 1% to 15%+ depending on risk, contract length, and repayment schedule of advance.

Example 1: A 12-month contract with an unexpired contract value of $100,000 paid monthly can be bought by Ratio at a discount rate of 6%. This means you get $94,000 in cash from Ratio.

Example 2: A 36-month contract with an unexpired contract value of $1,000,000 paid annually can be bought by Ratio at a discount rate of 15%. This means you get $850,000 in cash from Ratio.
What kinds of companies use Ratio Trade?
Ratio’s customers range from large public companies and large private enterprises to venture-funded early-stage and growth-stage startups, and bootstrapped companies with no outside investments.

All we look for is strong contractual commitment to future cash flows.
How is Ratio Trade better than Venture Debt?
Ratio Trade is different from Venture Debt in four key ways:
1) There are no warrants;
2) There are no covenants or restrictions;
3) You can convert select short-term, illiquid assets (long-term customer contracts) into instant liquid cash without any debt;
4) You can super stretch your company’s runway with no repayments for up to 12 months, as you pay Ratio only when the customer pays! In comparison, venture debt demands payments every month and interest-only— even when offered— is only for a short duration of the term.
How is Ratio Trade different from traditional Revenue Based Financing?
Ratio Trade is different from Revenue Based Financing in a fundamental way:
There is no automated repayment every month as a % of revenues.
You pay Ratio only when the customer related to the contract that you sold to Ratio pays!
Your relationship with Ratio is specific only to the contracts that were purchased by us. This allows you to super-stretch your runway and have more flexibility on repayments.
In addition, most revenue based financing services are not True Sale — meaning, the capital offered is treated as debt, and not as a direct substitution of assets for cash.
How is Ratio Trade different from Factoring?
Traditional factoring is a financial arrangement where companies can sell their pending invoices (accounts receivables) to a third party (factoring companies, lenders, or banks) in exchange for fast cash. Traditional factoring typically does not take into consideration uninvoiced but contractually committed services that have not been delivered yet. 

In contrast, Ratio is primarily about converting long-term contracts into cash. We also factor invoices if a client requests, but the primary goal is to pull un-invoiced, contractually binding cash receipts from the future to the present.
How does Ratio determine the discount rate for purchasing contracts?
Discount rates are determined by our risk engine that uses proprietary algorithms to assess the credit-worthiness of both the seller (SaaS / Tech company) and, most importantly, the customer. The discount rate is determined based on the combined risk score of the Seller and Seller’s customer.
What happens in the case of a dispute between the Seller and the customer?
In case of dispute between the Seller (SaaS or tech company) and the customer, the Seller is required to remedy the dispute. If the dispute is not resolved, any contracts purchased by Ratio have to be repurchased back by the Seller.
Who is responsible for collections?
It is up to the Seller. In our Boost model, Ratio is responsible for collecting from the Seller’s customer/buyer. In the Trade model, Ratio is unknown to the buyer and the Seller is responsible for collections.
How does Ratio make money?
Ratio purchases contracts for cash at a small discount. The discount can be paid by the seller or the buyer depending on which product (Trade or Boost) is being utilized to get cash upfront by the Seller. The discount percentage depends on the credit worthiness of both the seller and the buyer.
How does Ratio Boost work?
Ratio Boost is similar to consumer buy-now-pay-later but focuses on business buyers.
In Boost, the financing is embedded into the sales workflow and the financing costs can be passed on to the buyer. It can be embedded into the vendor’s website or their sales processes encapsulated in CRM and CPQ.
Do you pull my credit score? Are there personal guarantees?
We do not pull any personal credit scores or require personal guarantees, but may access a business credit report associated with your EIN. Ratio uses proprietary algorithms and underwiring to score each business and assess the risk.
What is the interest rate?
Our advances are not loans or debt. Hence we do not have the concept of principal and interest. However we do discount each contract based on the risk of the contract. The discount rate varies based on the term of the contract, risk of both the seller, and the risk of the buyer.