What the future holds for ARR lending after the SaaS-pocalypse

ARR lending—debt financing for SaaS companies underwritten against recurring revenue rather than EBITDA—faces a critical stress test as $300bn in software equity valuations evaporated in early 2026 and major loan cohorts approach covenant flip dates requiring transition to traditional EBITDA-based structures. Lenders have tightened underwriting standards and margins, shifting focus from growth projections to cash runway and profitability, with the next 12 months determining whether the ARR product survives as a viable debt class.

This Wire brief sits within Fusion42's coverage of Enterprise Software. Wire is Fusion42's founder-focused intelligence feed: each story is connected to the funds and startups it names — every one with a live profile on Raise or Scout — so founders can follow the capital and the momentum behind the headline rather than just the headline itself. Wire analysis is one of the live surfaces Arthur reasons over.