What is revenue-based financing, and how does it work?

What is revenue-based financing, and how does it work?

Revenue-based financing is a funding option where a company receives capital in exchange for a percentage of its future revenue. Repayments fluctuate based on revenue, so the payment amount adjusts according to business performance.

How is revenue-based financing different from traditional loans?

How is revenue-based financing different from traditional loans?

Unlike traditional loans with fixed payments, RBF repayments are based on a percentage of monthly revenue. RBF agreements use a factor rate, which determines the total repayment amount as a multiple of the original funding. For example, a factor rate of 1.2x means the business will repay 1.2 times the amount borrowed. Additionally, there’s no need for collateral, and it doesn’t require giving up equity.

What do I need to qualify for revenue-based financing?

What do I need to qualify for revenue-based financing?

Typically, we look for consistent revenue and strong cash flow. You’ll need to provide bank statements and a credit application so we can assess accordingly.

How much funding can I receive?

How much funding can I receive?

The amount typically depends on your revenue and business performance.

What percentage of revenue will I need to repay each month?

What percentage of revenue will I need to repay each month?

The percentage can vary but usually falls between 3% to 15% of your monthly gross revenue, depending on the agreement and your business profile.

How long will it take to get approved?

How long will it take to get approved?

The approval process is generally quick. After submitting your application and documents, you can receive an offer within 3-24 hours, with funding shortly after.

What documents do I need to submit?

What documents do I need to submit?

Typically, you’ll need: A completed credit application; The last 4 months of business bank statements; A voided check and a state-issued ID after accepting the offer.

How are payments made?

How are payments made?

Payments are automatically deducted via (ACH) from your account based on the agreed percentage of revenue. This continues until the total repayment amount (usually a multiple of the funding) is reached.

What happens if my revenue drops?

What happens if my revenue drops?

Since repayments are a fixed percentage of your revenue, lower revenue results in lower payments. This provides flexibility during slow periods.

Is there a penalty for early repayment?

Is there a penalty for early repayment?

There is no penalty for early repayment.

How long will it take to repay the financing?

How long will it take to repay the financing?

The repayment period varies depending on your revenue. On average, businesses repay RBF within 4-12 months.

What is the factor rate, and how does it work?

What is the factor rate, and how does it work?

The factor rate determines the total amount you’ll repay. For example, if you receive $10,000 with a factor rate of 1.179x, you’ll repay $11,790 over time.

Is collateral required?

Is collateral required?

No, RBF typically does not require any collateral, which reduces risk compared to traditional loans

What is revenue-based financing, and how does it work?

What is revenue-based financing, and how does it work?

Revenue-based financing is a funding option where a company receives capital in exchange for a percentage of its future revenue. Repayments fluctuate based on revenue, so the payment amount adjusts according to business performance.

How is revenue-based financing different from traditional loans?

How is revenue-based financing different from traditional loans?

Unlike traditional loans with fixed payments, RBF repayments are based on a percentage of monthly revenue. RBF agreements use a factor rate, which determines the total repayment amount as a multiple of the original funding. For example, a factor rate of 1.2x means the business will repay 1.2 times the amount borrowed. Additionally, there’s no need for collateral, and it doesn’t require giving up equity.

What do I need to qualify for revenue-based financing?

What do I need to qualify for revenue-based financing?

Typically, we look for consistent revenue and strong cash flow. You’ll need to
provide bank statements and a credit application so we can assess accordingly.

How much funding can I receive?

How much funding can I receive?

The amount typically depends on your revenue and business performance.

What percentage of revenue will I need to repay each month?

What percentage of revenue will I need to repay each month?

The percentage can vary but usually falls between 3% to 15% of your monthly
gross revenue, depending on the agreement and your business profile.

How long will it take to get approved?

How long will it take to get approved?

The approval process is generally quick. After submitting your application and
documents, you can receive an offer within 3-24 hours, with funding shortly
after.
What documents do I need to submit?

What documents do I need to submit?

Typically, you’ll need:
• A completed credit application.
• The last 4 months of bank statements.
• A voided check and a state-issued ID after accepting the offer.
How are payments made?

How are payments made?

Payments are automatically deducted via (ACH) from your account based on
the agreed percentage of revenue. This continues until the total repayment
amount (usually a multiple of the funding) is reached.
What happens if my revenue drops?

What happens if my revenue drops?

Since repayments are a fixed percentage of your revenue, lower revenue results
in lower payments. This provides flexibility during slow periods.
Is there a penalty for early repayment?

Is there a penalty for early repayment?

There is no penalty for early repayment.

How long will it take to repay the financing?

How long will it take to repay the financing?

The repayment period varies depending on your revenue. On average, businesses repay RBF within 4-12 months.
What is the factor rate, and how does it work?

What is the factor rate, and how does it work?

The factor rate determines the total amount you’ll repay. For example, if you receive $10,000 with a factor rate of 1.179x, you’ll repay $11,790 over time.
Is collateral required?

Is collateral required?

No, RBF typically does not require any collateral, which reduces risk compared
to traditional loans