<PAGE>

                                                                   EXHIBIT 10.14

                          LOAN MODIFICATION AGREEMENT


BETWEEN:  WatchGuard Technologies, Inc., a Delaware corporation ("Borrower"),
          whose address is 316 Occidental Ave. S., Suite 200, Seattle, WA 98104;

AND:      Silicon Valley Bank ("Silicon"),
          whose address is 3003 Tasman Drive, Santa Clara, California 95054;

DATE:     March 21, 2000


     This Loan Modification Agreement is entered into on the above date by
Borrower and Silicon.

     1.  Background.  Borrower entered into a Loan and Security Agreement with
Silicon in August, 1997 (as amended or modified from time to time, the "Loan
Agreement").  Capitalized terms used in this Loan Modification Agreement shall,
unless otherwise defined in this Agreement, have the meaning given to such terms
in the Loan Agreement.

     Silicon and Borrower are entering into this Agreement to state the terms
and conditions of certain modifications to the Loan Agreement and the Schedule,
as amended prior to the date of this Agreement.

     2.  Modifications to Loan Agreement and Schedule.

          2.1.  The Schedule to the Loan Agreement is hereby deleted and
replaced by the Amended and Restated Schedule to Loan and Security Agreement
attached to this Agreement.

          2.2.  Borrower acknowledges and agrees that all Obligations, including
without limitation Borrower's obligation to repay amounts advanced by Silicon to
Borrower on the terms of the Loan Agreement and Schedule as modified by this
Loan Modification Agreement, are secured by all liens and security interests
granted by Borrower to Silicon in the Loan Agreement.

     3.  Conditions Precedent.  This Loan Modification Agreement shall not take
effect until Borrower delivers to Silicon a Certified Resolution of Borrower and
such other documents as Silicon shall reasonably require to give effect to the
terms of this Loan Modification Agreement.

     4.  No Other Modifications.  Except as expressly modified by this Loan
Modification Agreement, the terms of the Loan Agreement, as amended prior to the
date of this Loan Modification Agreement, shall remain unchanged and in full
force and effect.  Silicon's agreement to modify the Loan Agreement pursuant to
this Loan Modification Agreement shall not obligate Silicon to make any future
modifications to the Loan Agreement or any other loan document.  Nothing in this
Loan Modification Agreement shall constitute a satisfaction of any indebtedness
of any Borrower to Silicon.  It is the intention of Silicon and Borrower to
retain as liable parties all makers and endorsers of the Loan Agreement or any
other loan document.  Except as provided in the Amended and Restated Schedule to
Loan and Security Agreement attached to this Agreement, no maker, endorser, or
guarantor shall be released by virtue of this Loan Modification Agreement.  The
terms of this paragraph shall apply not only to this Loan Modification
Agreement, but also to all subsequent loan modification agreements.

Page 1 - LOAN MODIFICATION AGREEMENT
<PAGE>

     5.  Representations and Warranties.

          5.1.  The Borrower represents and warrants to Silicon that the
execution, delivery and performance of this Agreement are within the Borrower's
corporate powers, and have been duly authorized and are not in contravention of
law or the terms of the Borrower's articles of incorporation, bylaws or of any
undertaking to which the Borrower is a party or by which it is bound.

          5.2.  The Borrower understands and agrees that in entering into this
Agreement, Silicon is relying upon the Borrower's representations, warranties
and agreements as set forth in the Loan Agreement and other loan documents.
Borrower hereby reaffirms all representations and warranties in the Loan
Agreement, all of which are true as of the date of this Agreement.

                                       Borrower:

                                            WATCHGUARD TECHNOLOGIES, INC.

                                            By: /s/ Michael McConnell
                                                ---------------------
                                            Name:  Michael McConnell
                                                   -----------------
                                            Title: Vice President of Finance
                                                   -------------------------



                                       Silicon:

                                            SILICON VALLEY BANK

                                            By: /s/ Carolyn Grant
                                                -----------------
                                            Name:  Carolyn Grant
                                                   -------------
                                            Title: Vice President
                                                   --------------

Page 2 - LOAN MODIFICATION AGREEMENT
<PAGE>

         AMENDED AND RESTATED SCHEDULE TO LOAN AND SECURITY AGREEMENT


Borrower:  WatchGuard Technologies, Inc.

Date:      March 21, 2000


SECURED ACCOUNTS RECEIVABLE LINE OF CREDIT

Credit Limit:  An amount not to exceed the lesser of: (i) $5,000,000 at any one
               time outstanding; or (ii) the amount of the "Borrowing Base," as
               defined below. For purposes of this Schedule, the "Borrowing
               Base" shall mean (i) 80% of the Net Amount of Borrower's eligible
               domestic accounts receivable, (ii) 50% of the Net Amount of
               Borrower's eligible foreign accounts receivable, and (iii) 100%
               of any cash pledged in an account satisfactory to Silicon. With
               respect to Borrower's accounts, "Net Amount" means the gross
               amount of the account, minus all applicable sales, use, excise
               and other similar taxes and minus all discounts, credits and
               allowances of any nature granted or claimed.

               Without limiting the fact that the determination of which
               accounts are eligible for borrowing is a matter of Silicon's
               discretion, the following shall not be deemed eligible for
               borrowing: accounts in which Silicon does not have a first
               priority, perfected security interest; accounts outstanding for
               more than 90 days from the invoice date, accounts subject to any
               contingencies, accounts owing from an account debtor outside the
               United States, accounts owing from governmental agencies,
               accounts owing from one account debtor to the extent they exceed
               25% of the total eligible accounts outstanding, accounts owing
               from an affiliate of the Borrower, and accounts owing from an
               account debtor to whom the Borrower is or may be liable for goods
               purchased from such account debtor or otherwise. Accounts owing
               from About Communications, Data Construction, Wick Hill
               (operations in France, Germany, and Great Britain), Otsuka
               Shokai, Unitech, Etek, GG Data, GEC Alstom, Linn, Magenta, Metro
               Link, Oriel, Performance Networking, Quaternaire, and Softnet
               shall be eligible as foreign accounts receivable for Borrowing
               Base purposes, subject to an advance rate of 50%. In addition, if
               more than 50% of the accounts owing from an account debtor are
               outstanding more than 90 days from the invoice date or are
               otherwise not eligible accounts, then all accounts owing from
               that account debtor shall be deemed ineligible for borrowing.

Interest Rate: The interest rate applicable to this Loan shall be a rate equal
               to the "Prime Rate" in effect from time to time, plus 0.50% per
               annum.

               Interest calculations shall be made on the basis of a 360-day
               year and the actual number of days elapsed. "Prime Rate" means
               the rate announced from time to time by Silicon as its "prime
               rate"; it is a base rate upon which other rates charged by
               Silicon are based, and it is not necessarily the best rate
               available at Silicon. The

Page 3 - LOAN MODIFICATION AGREEMENT
<PAGE>

               interest rate applicable to the Obligations shall change on each
               date there is a change in the Prime Rate.

Commitment
Fee:           $5,000.

Maturity
Date:          February 28, 2001, at which time all unpaid principal and accrued
               but unpaid interest shall be due and payable.

Letters of
Credit:        Subject to the terms of this Agreement, as amended from time to
               time, Silicon shall issue or cause to be issued under the Credit
               Limit standby and commercial letters of credit for the account of
               Borrower in an aggregate face amount not to exceed the Credit
               Limit. Each such standby letter of credit shall have an expiry
               date of no later than the Maturity Date. If the Secured Accounts
               Receivable Line of Credit expires or is terminated prior to the
               expiry date of any letter of credit issued hereunder, Borrower
               shall immediately secure the full face amount of any such letter
               of credit with a pledge of cash collateral. All such letters of
               credit shall be, in form and substance, acceptable to Silicon in
               its sole discretion and shall be subject to the terms and
               conditions of Silicon's form application and letter of credit
               agreement.

Merchant
Services:      Subject to the terms of this Agreement, as amended from time to
               time, up to $50,000 of Borrower's availability under the Secured
               Accounts Receivable Line of Credit shall be allocated to
               contingent liability of Borrower arising under Silicon's Merchant
               Services Program. Such liability is primarily comprised of write-
               offs and charge-backs arising from credit card transactions.

Prior Names
of Borrower:   See attached Exhibit B

Trade Names
of Borrower:   See attached Exhibit B

Trademarks
of Borrower:   See attached Exhibit B

Other
Locations and
Addresses:     See attached Exhibit B

Material
Adverse
Litigation:    See attached Exhibit B

Financial
Covenants:     The Borrower shall at all times comply with all of the following
               covenants, all of which shall be determined and measured on a
               monthly basis in accordance with generally accepted accounting
               principles, on a consolidated basis with any subsidiary of
               Borrower, except as otherwise stated below:

Page 4 - LOAN MODIFICATION AGREEMENT
<PAGE>

Tangible Net
Worth:         Borrower shall at all times maintain a Tangible Net Worth of not
               less than $15,000,000.

Profitability: Borrower shall not incur a loss (as defined below) in excess of
               the amount specified below for each rolling three (3) month
               period.  For purposes of this paragraph, "loss" means net income
               after taxes of less than $0.00, as reported on Borrower's
               financial statements.  "Loss" shall not include expenses relating
               to the BeadleNet acquisition, however, Borrower's total loss for
               the quarter ending December 31, 1999, including the BeadleNet
               acquisition expenses, shall not exceed $8,000,000.  The Borrower
               shall not incur a loss in excess of:

<TABLE>
                 Amount                    Period
               ----------     ---------------------------------------
               <C>            <S>
               $4,000,000     December 31, 1999 through June 30, 2000
               $3,000,000     July 31, 2000 through December 31, 2000
               $2,000,000     January 31, 2001 and thereafter
</TABLE>

Quick Ratio:   Borrower shall maintain a ratio of Quick Assets (defined below)
               to current liabilities less deferred revenue plus outstandings
               under any term loans owed to Silicon of not less than 2.00:1.00.

Definitions:   "Quick Assets" means cash on hand or on deposit in banks, readily
               marketable securities issued by the United States, readily
               marketable commercial paper rated "A-I" by Standard & Poor's
               Corporation (or a similar rating by a similar rating
               organization), certificates of deposit and banker's acceptances,
               and accounts receivable (net of allowance for doubtful accounts).

               "Tangible Net Worth" means stockholders' equity plus debt, if
               any, that has been subordinated to the Loans in a written
               subordination agreement on terms satisfactory to Silicon, and
               accrued interest thereon, less goodwill, patents, capitalized
               software costs, deferred organizational costs, tradenames,
               trademarks, and all other assets which would be classified as
               intangible assets under generally accepted accounting principles.

Other
Covenants:     Borrower shall at all times comply with all of the following
               additional covenants:

               Deposit Relationship.  Borrower and its subsidiaries shall at all
               times maintain their primary operating account with Silicon.

               Financial Statements and Reports.  The Borrower shall provide
               Silicon: (a) within 30 days after the end of each month, a
               monthly financial statement (consisting of a income statement and
               a balance sheet) prepared by the Borrower in accordance with
               generally accepted accounting principles; (b) within 30 days
               after the end of each month, an accounts receivable aging report
               and an accounts payable aging report; (c) within 30 days after
               the end of each month, a Borrowing

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<PAGE>

               Base Certificate in the form attached to this Agreement as
               Exhibit A, as Silicon may reasonably modify such Certificate from
               time to time, signed by the Chief Financial Officer of the
               Borrower; (d) within 30 days after the end of each month, a
               Compliance Certificate in such form as Silicon shall reasonably
               specify, signed by the Chief Financial Officer of the Borrower,
               setting forth calculations showing compliance (at the end of each
               such calendar month) with the financial covenants set forth on
               the Schedule, and certifying that throughout such month the
               Borrower was in full compliance with all other terms and
               conditions of this Agreement and the Schedule, and providing such
               other information as Silicon shall reasonably request; and (e)
               within 90 days following the end of the Borrower's fiscal year,
               complete annual CPA-audited financial statements, such audit
               being conducted by independent certified public accountants
               reasonably acceptable to Silicon, together with an unqualified
               opinion of such accountants.

Conditions to
Closing:       Without in any way limiting the discretionary nature of advances
               under this Agreement, before requesting any such advance, the
               Borrower shall satisfy each of the following conditions:

1. Loan
Documents:     Silicon shall have received this Agreement and the Schedule and
               such other loan documents as Silicon shall require, each duly
               executed and delivered by the parties thereto.

2. Documents
Relating to
Authority,
Etc.:          Silicon shall have received each of the following in form and
               substance satisfactory to it:

               (a) Certified Copies of the Articles of Incorporation and Bylaws
               of the Borrower;

               (b) A Certificate of Good Standing issued by the Secretary of
               State of the Borrower's state of incorporation and such other
               states as Silicon may reasonably request with respect to the
               Borrower;

               (c) A certified copy of a Resolution adopted by the Board of
               Directors of the Borrower authorizing the execution, delivery and
               performance of this Agreement, and any other documents or
               certificates to be executed by the Borrower in connection with
               this transaction; and

               (d) Incumbency Certificates describing the office and identifying
               the specimen signatures of the individuals signing all such loan
               documents on behalf of the Borrower.

Page 6 - LOAN MODIFICATION AGREEMENT
<PAGE>

3. Perfection
and Priority
of Security:   Silicon shall have received evidence satisfactory to it that its
               security interest in the Collateral has been duly perfected and
               that such security interest is prior to all other liens, charges,
               security interests, encumbrances and adverse claims in or to the
               Collateral other than Permitted Liens, which evidence shall
               include, without limitation, a certificate from the appropriate
               state agencies showing the due filing and first priority of the
               UCC Financing Statements to be signed by the Borrower covering
               the Collateral.

4. Insurance:  Silicon shall have received evidence satisfactory to it that all
               insurance required by this Agreement is in full force and effect,
               with loss payee designations and additional insured designations
               as required by this Agreement.

5. Other
Information:   Silicon shall have received such other statements, opinions,
               certificates, documents and information with respect to matters
               contemplated by this Agreement as it may reasonably request, all
               of which must be acceptable to Silicon.

               Silicon shall have conducted an examination of the Borrower's
               books, records, ledgers, journals, and registers, as Silicon may
               deem necessary, and shall be satisfied with the results of such
               examination in its sole discretion.

     Silicon and the Borrower agree that the terms of this Schedule supplement
the Loan and Security Agreement between Silicon and the Borrower and agree to be
bound by the terms of this Schedule.

                                            Borrower:

                                            WATCHGUARD TECHNOLOGIES, INC.


                                            By: /s/ Michael McConnell
                                                ---------------------
                                            Title: Vice President of Finance
                                                   -------------------------


                                            Silicon:

                                            SILICON VALLEY BANK


                                            By: /s/ Carolyn Grant
                                                -----------------
                                            Title: Vice President
                                                   --------------

Page 7 - LOAN MODIFICATION AGREEMENT
<PAGE>

                                 EXHIBIT A
                                 ---------

                           BORROWING BASE CERTIFICATE


<TABLE>
<S>                                                      <C>
Borrower: Watchguard Technologies, Inc.                  Lender: Silicon Valley Bank
          316 Occidental Avenue South, Suite 300                 3003 Tasman Drive
          Seattle, WA 98104                                      Santa Clara, CA 95054
Commitment Amount: $5,000,000
</TABLE>


    ACCOUNTS RECEIVABLE
     (1)  Accounts Receivable Book Value as of _______            $_______
     (2)  Additions (please explain on reverse)                   $_______
     (3)  TOTAL ACCOUNTS RECEIVABLE                               $_______

    ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
     (4)  Amounts over 90 days due      $_______
     (5)  Balance of 50% over 90 day accounts      $_______
     (6)  Credit balances      $_______
     (7)  Concentration Limits       $_______
     (8)  Ineligible Foreign Accounts      $_______
     (9)  Governmental Accounts      $_______
    (10)  Contra Accounts      $_______
    (11)  Promotion or Demo Accounts      $_______
    (12)  Intercompany/Employee Accounts       $_______
    (13)  Other (please explain on reverse)      $_______
    (14)  TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS      $_______
    (15)  Eligible Accounts (#3 minus #14)      $_______
    (16)  LOAN VALUE OF ACCOUNTS (80% of #15)      $_______
    (17)  Eligible Foreign Accounts/1/      $_______
    (18)  LOAN VALUE OF ELIGIBLE FOREIGN ACCOUNTS (50% of #17)      $_______
    (19)  Eligible Cash Collateral       $_______
    (20)  LOAN VALUE OF CASH COLLATERAL (100% of #19)      $_______
    (21)  TOTAL LOAN VALUE (#16 plus #18 plus #20)      $_______

    BALANCES
     (1)  Maximum Loan Amount      $_______
     (2)  Total Funds Available [Lesser of #22 or #21]      $_______
     (3)  Present balance owing on Line of Credit      $_______
     (4)  Letters of Credit outstanding/2/      $_______

------------
/1/ Accounts owing from About Communications, Data Construction, Wick Hill
(operations in France, Germany, and Great Britain), Otsuka Shokai, Unitech,
Etek, GG Data, GEC Alstom, Linn, Magenta, Metro Link, Oriel, Performance
Networking, Quaternaire, and Softnet shall be eligible as foreign accounts
receivable.

Page 8 - LOAN MODIFICATION AGREEMENT
<PAGE>

     (5)  Merchant Services Program/3/      $_______
     (6)  RESERVE POSITION (#23 minus #24, #25 and #26)      $_______



------------
/2/ Maximum of $5,000,000.
/3/ Maximum of $50,000.


Page 9 - LOAN MODIFICATION AGREEMENT
<PAGE>

The undersigned represents and warrants that this is true, complete and correct,
and that the information in this Borrowing Base Certificate complies with the
representations and warranties in the Loan and Security Agreement between the
undersigned and Silicon Valley Bank.

COMMENTS:

WATCHGUARD TECHNOLOGIES, INC.


By:
   --------------------------------
Name:
     ------------------------------
Title:
      -----------------------------

                                                         BANK USE ONLY
                                                   Rec'd By:_______________
                                                             Auth. Signer
                                                   Date:___________________
                                                   Verified:_______________
                                                             Auth. Signer
                                                   Date:___________________

Page 10 - LOAN MODIFICATION AGREEMENT