How to choose the right UA financing partner: A founder’s guide

User acquisition (UA) financing is evolving fast. With new players entering the space - VC funds, publishers, SaaS platforms, and specialized lenders - founders now have more options than ever. That's a good thing. The mobile ecosystem has suffered over the past several years from a lack of growth capital.  More capital sources means more flexibility, competition, and innovation.

But more options also means more complexity.

In recent months, I've had conversations with many founders weighing different offers. Often, the first (and only) question they have is: "What's the interest rate?"

And while pricing is critical, it's just one part of the equation. Choosing the wrong lending partner - in an effort to save a few basis points - can create hidden risks, friction, or even stall your growth.

Here's a framework founders should use to evaluate UA financing partners:

1. Pricing (but look beyond the headline rate)

Compare apples to apples.
Every lender calculates pricing differently - some use fixed interest rates, others charge fees or take revenue share. You need to look at the effective IRR, which reflects the true cost of capital after factoring in structure, repayment timing, and hidden fees.

Key questions to ask:

• Is the repayment based on cohort's recoup or is it fixed?
• Am I required to draw down a minimum amount every month or is there flexibility?
• Are there origination/setup fees? SaaS fees you're required to take? Exit fees?

Watch out for:

• "Cheaper" rates that come with required monthly drawdowns - these often will cost you more in total interest.
• Hidden fees billed separately but tied to the financing.
• Structures where the lender ultimately controls spend decisions - this is more like a publishing deal than UA financing.

2. Facility size (Can they scale with you?)

It's easy to overlook, but capacity is key. Some lenders simply don't have the fund size or risk appetite to scale alongside a fast-growing app.

Key considerations:

• Can this partner grow with your needs over time?
• Will I have to renegotiate or switch lenders when I scale?

Even if another lender could step in later, switching has real costs - legal work, underwriting delays, and potentially losing momentum. In today's competitive UA landscape, pausing your growth for even a month can let your rivals steal share.

3. Flexibility of terms (And what happens if you miss)

Most UA financing structures are tied to performance thresholds - usually based on ROAS payback curves. If you miss those targets, the lender may:

• Accelerate repayment
• Pause future funding
• Potentially trigger default provisions

What to watch for:

• Ensure that the thresholds are set where you have room to scale and are comfortable that you won't be at risk of breaching them, because breaching them will limit your growth and potentially put you in a cash flow crunch
• If there are no explicit thresholds, that is actually worse - the lender will have internal risk limits they aren't disclosing. That means they can stop funding at any time, and you won't know where those red lines are.

Transparency matters. If they won't tell you how they think about risk, don't trust them to be there when you hit a bump.

4. Counterparty risk (Who are you getting into business with?)

Your lender will have full access to your UA data, product KPIs, and financials. You need to be confident they won't use it against you.

If your lender is also a publisher:

• Are they using your performance data to optimize their own titles?
• Will they cut funding and try to push you into a below market M&A deal?

If your lender is also a VC:

• If they're not on your cap table - are they using your data to go and fund your competitors?
• If they are - do you want to consolidate that much influence in one entity? Your whole cap table may not be aligned in every scenario (for example, on M&A offers).  You may not want to give more power to your existing investors to control you in these scenarios.

If your lender is a SaaS or tools company:

• Are they offering just enough credit to win you as a software customer but won't scale with you?
• How committed are they really to the lending business?

Note: Bottom line, incentives matter. When push comes to shove, companies will act in line with their own interests - which may not align with yours.

5. Risk sharing (what happens if performance slips?)

Not all loans carry the same risk to you as a borrower. Some are secured by company assets, others are non-recourse and only secured by cohort performance.

Key questions:

• Is the loan secured by the company's assets, or just the user acquisition cohorts?
• Is repayment based on actual performance or fixed dates?
• Will poor-performing cohorts impact your company's broader cash flow?

If the lender can come after your balance sheet for underperforming UA spend, that's a much lower risk for them - and should come with a cheaper rate. Make sure you understand this trade-off.

Some lenders mask this risk with fixed repayment schedules, even if they may appear to be performance-based. Avoid this unless you're confident your cohorts will hit target every time.

6. Comfort level with your funder/fund reputation

When you raise an equity round, it's widely accepted that you should not simply take the highest valuation - you evaluate the reputation, behavior, and alignment of the investor. The same logic applies - even more critically - to debt financing.

This is a credit agreement. If things go sideways - and at some point, they may - how your lender behaves can literally determine whether you survive or not.

• What happens if you miss a performance threshold?
• What happens if you pause spend for a few weeks?
• What happens if your metrics temporarily underperform?

You want to know the answer before you're in that situation.

Ask for references.
Not just from companies that scaled successfully - ask for intros to teams that:

• Tripped a covenant
• Missed their ROAS curve
• Decided to stop working with the lender

How did the lender respond to these situations? Were they collaborative or combative? Did they try to fix the problem - or weaponize the default?

If the lender can't or won't provide those references, that's a major red flag.

7. Ease of use (Don't underestimate the operational burden)

Beyond structure and economics, you should also assess how much friction your financing partner will introduce into your day-to-day operations. Time and focus are limited - the last thing you need is to burn cycles reconciling spreadsheets or chasing down funding status.

Key questions to ask:

• Does the lender insert themselves between you and your ad network partners?
  • Do they require access to your Apple or Google developer accounts?
  • Do they sit in the flow of funds or add delays to ad revenue collection?
• Do they provide a platform or dashboard where you can:
  • See how much you owe each month?
  • Track repayments by cohort?
  • Monitor your performance against ROAS or payback thresholds in real time?
• Or will you be stuck managing this manually - with no transparency and a risk of missing critical signals?

Operational complexity can kill momentum just as fast as bad terms. You want capital that works with your system, not against it.

Final thoughts

The best UA financing partner will:

• Offer transparent, scalable capital
• Set realistic, data-driven thresholds
• Stick with you when performance isn't perfect
• Make money only when you do

If their real motivation is something else - client conversion, M&A, competitive insight - you're taking on more risk than you think.

Choose your lender like you'd choose a co-founder. The wrong one can slow you down. The right one should help you grow - on your terms.