Revenue-based financing: how does it work?
Revenue-based financing is sized on what the business takes in, not on a business plan. The lender sets the amount, the cost and the repayment schedule, in its written offer.
Choose my amountThe answers
- How does revenue-based financing work?
- A lender disburses a sum to the business, sized on its deposits, and the business repays it out of its revenue. The amount, the cost and the repayment schedule are set by the lender in its written offer.
- What is the amount based on?
- On the actual deposits in the business account, month by month, and on how regular they are. You choose an amount between $15,000 and $500,000 as an estimate; the lender sets its own.
- What do lenders usually ask for?
- A few months in business and a minimum of monthly deposits in the business account. Each lender sets its own thresholds, and it is the one that decides.
- What does revenue-based financing cost?
- The cost is set by the lender, file by file, and written in its offer. Read the total cost and the repayment schedule there before deciding; you are free to decline.
- Do I need real-estate collateral?
- No, no real-estate collateral is required. The lender may ask for a personal guarantee or security on business assets.
What the lender looks at
- Actual deposits, month by month
- The sum a lender considers follows what comes into the account.
- Trend over the period
- The lender looks at whether deposits climb, hold or fall.
- Days in overdraft
- An account often below zero leaves little room for a repayment.
- Payments to other lenders
- An advance already running comes off what a new lender can offer.
- How long the business has been operating
- This product usually asks for less time in business than a line of credit.
$0 upfront · 7% only if funded
An intermediary, not a lender.
The lender sets the final amount and its cost in its written offer.
Choose my amount