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Project Lattice: Software recurring revenue loan
SAMPLE: fictional company, illustrative figures. Not a real borrower, deal or lender group.
Vertical SaaS, sized on ARR, converts to EBITDA tests later.
One deal, end to end
Documents arrive; agents run without anyone starting them; people decide at each gate. Each stage links to its use case.
1. SCREEN
In: CIM, ARR cohort data
Agents produce: ARR quality screen vs fund box
Human gate: Go / no-go
2. UNDERWRITE
In: KPI history, draft agreement
Agents produce: Recurring revenue definition test, sizing vs ARR
Human gate: IC approves terms
3. CLOSE
In: Final agreement
Agents produce: ARR, liquidity and conversion tests loaded
Human gate: Counsel signs off
4. MONITOR
In: Monthly KPI pack
Agents produce: ARR leverage, liquidity runway, flip readiness
Human gate: PM decides on sponsor call
Found: Both ARR tests pass, but EBITDA after capitalised software is negative, so the borrower can’t elect conversion.
5. REPORT
In: Monitoring history
Agents produce: Retention and liquidity trend for the portfolio review
Human gate: PM / IR sign-off
- Each team re-reads and re-keys the same documentsDeal team → counsel → portfolio team → ops
- Hand-offs by email and spreadsheetContext lost at closing
- Documents land in the doc storeTrigger
- Shared extraction feeds every stageAutomated
- Stage outputs draftedAI draft, human review
- Gate decisions loggedHuman only
Supporting documents (SAMPLE inputs)
Term sheet
| Term | SAMPLE term sheet |
|---|---|
| Borrower | Project Lattice (fictional), vertical SaaS for specialty subcontractors, sponsor-backed |
| Facilities | $95.0m term loan; $10.0m revolver (undrawn at close, Dec 2025) |
| Sizing | About 1.5x Recurring Revenue at close |
| Pricing | Term SOFR + 6.25% before conversion; + 5.50% after |
| Covenants before conversion | Maximum Total Debt to Recurring Revenue 1.85x; Minimum Liquidity $12.0m (cash plus undrawn revolver), tested monthly |
| Conversion | Earlier of borrower election after month 12 (if Total Leverage is 7.00x or lower) and Q4 2028; then Maximum Total Leverage 7.00x stepping to 6.00x |
| EBITDA definition | After deducting capitalised software development costs |
| Recurring Revenue definition | Annualised contracted subscription revenue, excluding customers that have given notice of non-renewal or are 90+ days past due |
Monthly KPI pack
| Monthly KPI pack (SAMPLE) | Jul 26 | Aug 26 | Sep 26 |
|---|---|---|---|
| ARR as reported ($m) | 62.2 | 62.7 | 63.1 |
| Gross revenue retention (LTM) | 93% | 91% | 89% |
| Net revenue retention (LTM) | 106% | 105% | 104% |
| Cash ($m) | 10.2 | 9.3 | 8.4 |
| Capitalised software dev, LTM ($m) | 5.2 | ||
| Notes | Customer with $1.4m ARR gave notice of non-renewal on 12 Sep |
Market context for the SAMPLE terms
- DLA Piper 2026: ARR debt multiples from below 1x up to about 2x to 2.5x for the largest deals; minimum liquidity in all ARR deals; conversion typically 3 to 4 years
- Latham / Practical Law: conversion on borrower election (EBITDA leverage test) or a date certain, often 2 to 4 years
Next step
Use cases that run on this pack
Not investment advice. Fictional company; any resemblance to a real business is unintended.