Digital media is one of the most dynamic industries in the business world. It’s niche, diverse, and constantly evolving. Despite growing into a $740B+ annual market, digital media financing is hard to access, and the industry remains financially underserved. This post is to help you understand why, what you can do about it, and how we help media companies access funding.
Why Digital Media is Hard to Finance
It’s difficult to find a good digital media financing provider. Because he industry is constantly evolving, diverse, and most capital providers simply “don’t get it”. As a result, many media businesses remain underserved with capital, with only a few reputable firms financing the industry.
As the founder of one of those companies, OAREX Capital Markets, I’m going to lay it all out for you. In. this post, I’ll address why digital media financing is hard to access, what types exist, and what questions (and answers) you need to have before you sign with a new partner.
Digital Media is Constantly Evolving
For traditional banks and investors, digital media is hard to understand because it’s always evolving. It’s dominated by a tech-forward, innovative and risk-willing entrepreneurs, constantly venturing into the unknown. With new technologies emerging every few months, as well as new channels to capture eyeballs (i.e. to sell more inventory), models keep changing. Of course, depending on where a company is at in the digital media ecosystem.
Which brings me to my second point: it’s hard to understand because of the diversity of business models.
Many Different Digital Media Business Models
As it stands right now, these are the 5 main verticals within digital media, each with a distinct business model which can be financed:
Publishers
Mostly web 2.0 publishers and app developers selling ad space to advertisers. They sell their ad inventory directly to the exchange or intermediary plugged into the exchange. But technically, this includes ANY owner of the asset where the ad inventory is being displayed. Meaning, it could be the TV display at the local BMV, or a hotel lobby, or Digital-Out-Of-Home (DOOH) advertisement in New York City Times Square. Whoever owns that asset, is the “publisher”. By definition, a video game creator or a news website or a billboard – are all publishers.
Ad Networks
Ad networks are intermediaries that help smaller publishers access top tier ad dollars, by aggregating their ad inventory to sell in bulk on exchanges. This is because not all publishers have the audience size (inventory needed) to sell direct on the exchange. Ad networks help publishers access better ad dollars through strength in numbers. As an intermediary, they down sell the amount of ad dollars available to the publishers. i.e they take their cut.
Exchanges & Their Partners
The actual “marketplace” where buyers and sellers exchange ad inventory for dollars. To sit on the exchange, companies must have a certain size and scale to participate. Supply Side Platforms (SSPs) facilitate those selling inventory by ad networks and very large publishers, and DSPs to facilitate those buying inventory (media buyers, agencies, and brands).
Media Buyers
Skilled professionals who use a DSP to buy ad inventory. They buy it on behalf of their own company, an agency, or brand. Sometimes, the media buyer is the DSP itself. In this case, they not only offer the inventory, but also helps the brands display their ads. A unique hybrid model is Meta: they act as both the publisher and the DSP where you and I can buy ads. Other more prevalent DSPs in 2026 include companies serving Over-The-Top (OTT) and Connected TV (CTV) ads.
Agencies & Brands
The ultimate demand source of ad dollars with agencies representing the brands and companies that hire them to spend it. Agencies are a hard business to scale because they require big upfront investments to onboard new clients (i.e. executing on a large Insertion Order). Brands are notorious for pay terms as long as 180 days.
Multiple Models Means Multiple Risks – Creating a Chilling Effect
Since each vertical in Digital Media has a different business model, they also have different risks. A publisher might get hit with a DDOS attach, or a frauder could fake their traffic with bots, while an app developer might get kicked off the App Store for innocently violating terms. Exchanges might have a legal clause in their agreements called “consequential liability” which means they don’t pay for inventory if they don’t get paid by the demand partner. For media buyers, they may have to spend the money upfront to get things started. And for agencies, they run the risk of signing a client on net 90, only to be paid net 180. Brands are notorious for the delay.
When banks and traditional investors see this, it creates a “chilling effect” for their money. Not knowing what new risk might pop up, they tend to stay away. In fact, there are many sales based financing institutions we’ve partnered with that won’t fund a company if it so much has “media” in the business name. They just stay away.
Self-Invoicing Causes Confusion for Traditional Capital Partners
Digital media is exactly that: digital. There are no “invoices” that can generated, because many of the platforms (i.e. Google, App Store) self invoice themselves on behalf of the customer.
When digital media founders are talking to capital providers, they’re almost invetably asked “send us copies of your invoices”. But the problem? There is no invoice. There’s a digital login, a dashboard, and a reporting/payments section. It says who owes who what, when, and for how much (exactly what an invoice does). But, there is no actual “invoice” in the traditional sense. And believe me when I say, most capital providers cannot understand this self-invoice mechanism, and that is an auto-decline.
This is what led me to start my first digital media financing company. Other capital providers couldn’t wrap their heads around it, and I raised $100M to fund it while at OAREX. As I said earlier, most capital providers simply “don’t get it”.
Fast forward to 2026, as a third party capital provider at Capital Desk (and still a minority owner at OAREX / referral partner for them), we continue to fund digital media: 29% of our clients are in digital media, advertising, marketing, or ad agencies.
So, what’s available in the world of digital media financing?
Now, the good stuff.
Digital Media Financing Options
The two main digital media financing categories are asset-based financing and sales-based financing.
Asset Based Financing
Asset-based financing (ABF) is funding secured by receivables and insertion orders. It’s almost always “senior” in your capital stack, and common providers include Silicon Valley Bank, OAREX, Coral Capital, and SLR Digital Finance.
Lines of Credit
A line of credit enables you to borrow against your basket of customer receivables. Lines of credit are in such high demand, because borrowers only pay the interest on the balance. The loan amount doesn’t amortize until the end, so it’s much less burdensome on cash flow. In fact, they’re in such high demand, many borrowers looking for sales based financing get duped by being offered a line of credit. But in reality, so few qualify.
Do you qualify?
A true line of credit is generally limited to companies with 2+ years of profitability and $3M+ in EBITDA. Usually has a personal guarantee built into it.
Example:
You have a solid group of customers you do business with. Let’s say at any point in time they owe you $100K in total. You can borrow up to 60-65% of that, and pay interest only payments back to the funder. The lender in this scenario usually has control of your bank account and if they get nervous, they can call your balance at any time. The financing partner will NOT take the risk your customers don’t pay.
Media Receivables Factoring
Invoice factoring enables you to “sell” your receivables at a discount to a Factoring company, usually up to 80%. Unlike a line of credit, factors take the risk your customers don’t pay (which is they they must be approved for credit). i.e. they must be large enterprise customers like Google or Apple. Upon payment of the invoice by your demand side partner directly to the financing company, the remaining, “unadvanced” portion of the receivable gets paid to you, minus the funders fees.
Example:
Google Doubleclick owes you $100K on July 31st, 2026 for May, 2026 revenues (net 60 pay terms). June 1st – you “sell” your A/R to a financing company and receive $80K upfront (80% advance rate). July 31st – the financing company gets paid the full $100K, and sends you the balance, minus their fees for the 2-month period their capital was outstanding.
Do You Qualify for Asset Based Financing (ABF)?
The bare minimum requirements for ABF include:
B2B Customers – At a minimum, you must have B2B customers – and the bigger, the better. If you have Enterprise size clients, and you’re profitable, the chances of a line of credit are very good.
Good Customer Credit – if a bank other non-bank financial institution cannot approve your customers for credit, they won’t approve you for a line of credit or factoring.
Profitability is required for a line of credit, but usually not for factoring.
Good to know about Asset Based Financing (ABF)
- ABF partners are mutually exclusive – you can only have ONE at a time since they take a senior position on your collateral
- ABF partners require covenants, and that is reflected in a lower price than other options.
- ABF partners often times require your customers pay them directly or into a lockbox bank account in your name (which they control). It’s important you think through the operations and optics of this!
- ABF partners offering a true lines of credit will almost always require a personal guarantee.
Since asset based funders are always senior, they will take your receivables as collateral.
Sales Based Financing
Sales-based financing (SBF) is a less popular but sometimes more viable alternative to ABF. It can sit behind a bank, does not require B2B customers with good credit, nor does it require profitability. For many customers, it’s a viable op tion if they have a senior partner in place and need more money, or if they don’t want their customers to be notified to “redirect” payment to the financing institution.
Example:
You finance forward 5% of your annual revenue for lump sum capital upfront. In exchange, you payback a fixed amount of your receipts, for a fixed period of time, up to a fixed payback. For example, $130K of future sales, purchased and funded today for $100K, payable in 52 equal weekly installments.
When to Use Sales Based Structures for Digital Media
- You don’t qualify for a senior, asset-based financing partner
- Your existing asset based partner can’t provide you with more capital
- You don’t want to set-up a new bank account or redirect revenues
- You don’t want to notify customers of your new financing partnership
- You don’t want a personal guarantee on the deal
Good to know with SBF:
- A deal structure like SBF doesn’t mean it’s not a loan.
- There are many loans disguised as SBF. If you don’t pay, the funder can act like a lender
- The main distinguishing factor is the funders “right to collect”. If the funder has an “unconditional” or “absolute” right to collect, it’s a loan; no matter what the financing arrangement is called.
- Also many sales based financing products claim to not have a personal guarantee, but a “performance guarantee”. However, these can function like a personal guarantee if you’re not careful with the language you’re signing off on.
Words of Warning with SBF
If you are currently in a financing arrangement, and need more capital, read this carefully. While sales based financing is certainly a viable option, it must be done the right way. If you take additional capital, you could trigger a default under your senior financing arrangement. This could literally kill your business if your financing partner stops funding you. Where Capital Desk can help is doing it the right way, so make sure you take capital with the approval of the senior partner, protecting their collateral.
Final Thoughts on Digital Media Funding Options
There’s not a single digital media business we can’t wrap our heads around and we’re here to help you navigate the capital markets. If you sell B2B and live in the programmatic ecosystem, there are options for you. For profitable companies, they can secure capital from a bank like SVB, or alternative ABL lender like SLR Digital Finance. Companies less than two years old, or not yet profitable, they can only really go to a firm like OAREX or Coral Capital.
If you need insights into how these companies are underwriting deals, you’re welcome to reach out to us. If none of those options work, or you’re already with a senior funder, you can work with a firm like us. We can potentially provide you with a sales based infusion that sits behind or “junior” to your existing financing partner.
Regardless of where you’re at in the programmatic advertising ecosystem, we’re here to suppport you with liquidity.
