Managed service providers and IT support companies run on recurring contracts, but the upfront costs — software licensing, hardware, and technician payroll — often land before the monthly billing catches up. Here's how MSPs actually fund the gap.
Where IT companies feel the cash crunch
- Software and licensing renewals — annual vendor renewals often hit as a lump sum, not spread monthly
- Client-site hardware purchases — fronting equipment costs before client reimbursement or before the deal closes
- Hiring ahead of a new contract — staffing up a help desk or field team before the new account's first invoice
- Slow sales quarters — fixed payroll continues even when new contract signings slow down
Funding options that fit MSP cash flow
- Revenue-based financing — underwritten on deposits, so steady monthly recurring revenue (MRR) from support contracts counts even without hard collateral; see revenue based financing
- Equipment financing — for servers, networking gear, or client-site hardware tied to a specific deal; see equipment financing
- Working capital lines — a revolving cushion for payroll and licensing renewals without reapplying every cycle; see working capital loans
💡 What underwriters look for: consistent monthly deposits from recurring support contracts underwrite more favorably than one-time project invoices, even if the project invoice is larger. MRR is the strongest signal you can show.
Before you apply
Have 3-4 months of business bank statements ready — see how lenders read your bank statements — and the full document checklist. Approval and terms are always subject to lender underwriting; nothing here is a guarantee of approval.
Cover licensing, hardware, or payroll today
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Check My Funding OptionsFAQ
Can an MSP get funding based on recurring contracts instead of collateral?
Yes — revenue-based financing underwrites against bank deposits, so steady MRR from support contracts can qualify without pledging hardware or other collateral.
What do IT companies typically use funding for?
Software licensing renewals, hiring technicians ahead of a new contract, client-site hardware purchases, and payroll during a slow sales quarter.