Venture debt is quietly having a moment, and a new deal shows why founders should pay attention. Sage, an integrated care platform for senior living and skilled nursing care, announced a Specialized debt of $35 million facility from Stifel Bank, bringing its total funding for 2026 to $100 million when combined with a recent $65 million Series C round led by Goldman Sachs Alternatives.
For young founders, the structure of the raise is as instructive as its scale. Sage did not fully fund its next phase by selling its property. It mixed equity and debt, a choice that is becoming increasingly common as founders seek to grow without giving away more of their company than they should.
Inside Sage’s $100 million year
Sage builds hardware and software for aged care facilities and will use the new credit facility to scale its Hardware-as-a-Service, or HaaS, model. Under this approach, customers pay over time for devices and associated services rather than purchasing the equipment outright.
This business model is exactly why debt is suitable. Hardware as a Service generates predictable, recurring payments, and lenders like Stifel can underwrite those cash flows. The $35 million facility allows Sage to purchase and deploy more devices without diluting shareholders to finance inventory.
Combined with its $65 million seed round, Sage now has $100 million to work with in 2026. This combination gives it aggressive capital for growth while keeping ownership more concentrated, a balance many founders struggle to find. This is the kind of disciplined capital planning that supports the broader lesson why ambition, not comfort, builds great companies.
Why junk debt is having a moment
After a period of tight markets, founders became reluctant to raise capital at flat or lower valuations, forcing them to sell more of the company for the same price. Debt offers an alternative. It provides capital now without resetting your valuation or giving investors additional control.
However, venture debt is not free money. It has interest, covenants and repayment schedules, and it works best when a business has predictable revenue or a recent capital raise to fall back on. Used carelessly, it can put pressure on a young company at exactly the wrong time.
The tool extends beyond flashy tech names into operations-heavy companies like Sage, where equipment and working capital drive growth. Founders can learn the mechanics from established resources, including the US Small Business Administration’s overview of business loan programs and financing options, before contacting a lender.
How Founders Should Consider Debt vs. Equity
The central question is what you are financing. Equity is suitable for uncertain, high-risk bets, like early product development, where you can’t promise repayment. Debt addresses predictable needs like inventory, equipment, or expansion in a proven market, where cash flow can cover payments.
It also depends on your stage. A startup that isn’t generating revenue typically can’t repay its debt, while a company with recurring revenue can use it to stretch its existing cash flow and delay the next funding round. The rigor of your financial operations is a prerequisite, a point we highlighted in our article on payment problems founders ignore until it becomes expensive.
Discipline is everything. Borrow based on reliable, hopeless income and model what happens if growth slows before the loan is repaid. Founders who scale their operations carefully, as outlined in our guide to grow a startup and hiring, tend to manage leverage much better than those who seek growth at all costs.
What to watch next
Watch to see if more startups in hardware, healthcare, and other capital-intensive fields follow Sage’s blended strategy playbook. As recurring revenue models become more widespread, lenders have more predictable cash flows to secure, which should expand access to subprime debt.
Also monitor interest rates and lender appetite. Debt is attractive when it is affordable, and changes in borrowing costs will change how founders use it aggressively. A facility that makes sense today could seem costly if conditions tighten.
The takeaway is that fundraising is no longer a simple choice between seeding and selling equity. Founders who understand the entire menu of capital and tailor each source to the right need will retain more of their business while continuing to grow rapidly. Sage’s $100 million a year is a case study for doing just that.
