Building Your Debt Stack: From AED 100 K Micro Facility to Multi-Million Scale-Up

Stage 1 Launch (0-12 Months Revenue)

• Source: Founder savings, supplier credit, micro-RBF ≤ AED 250 K.
• Goal: Validate product, hit 5-figure monthly revenue.
• Tip: Keep monthly debt service < 20 % gross profit.

Stage 2 Early Growth (Year 1-2)

• Add: KCTL top-up, bank overdraft backed by receivables.
• Blend Target: 70 % RBF, 30 % overdraft to cover same-day settlement gaps.
• Metric Watch: DSCR ≥ 1.3.

Stage 3 Scale (Year 2-4, AED 1-10 M ARR/GMV)

• Layer: Supplier trade lines (Net30), asset lease for equipment, second KCTL line.
• Stack Composition Example
  | Instrument | Limit | Cost (annualised) | Security |
  |------------|-------|-------------------|----------|
  | KCTL Line | AED 2 M | 16 % eq. | None |
  | Bank OD | AED 500 K | 14 % | A/R pledge |
  | Trade Credit | AED 1 M | 0 % (discount lost) | Personal g’tee |

Stage 4 Pre-Series A+

• Introduce: Venture debt or mezzanine if equity round priced but delayed.
• Optimize: Swap expensive OD for larger KCTL share (no renewals).
• Covenants: Avoid multi-lender cross-defaults—centralise with 1–2 providers max.

Stage 5 Mature & Profitable

• Objective: Minimise weighted cost of capital.
• Strategy:
  1. Stretch payment terms with suppliers (Net45→90).
  2. Refinance earliest RBF lines into long-tenor bank facilities if collateral now acceptable.
  3. Keep small KCTL pool for tactical promo bursts—speed still matters.

Conclusion

A thoughtful debt stack grows like a skyscraper: wider base, stronger columns, flexible design.

CTA: Book a 30-minute stack-planning session—free for existing borrowers.