Revenue-Based Financing: Aligns With Your Business Growth
Revenue-Based Financing (RBF) is a flexible alternative to traditional loans. You receive capital today and repay a small fixed percentage of monthly revenue until a predetermined cap is reached. Payments breathe with your business — they're large in strong months, smaller in slow ones.
How RBF works
You receive a lump-sum funding amount. In exchange, you commit to paying a fixed percentage (typically 3% – 12%) of your monthly revenue until you've repaid a multiple of the original amount (typically 1.2x – 1.5x).
Unlike an MCA, RBF is calculated on monthly (not daily) revenue. There's no fixed payment schedule — strong months mean you pay more, slow months mean you pay less. The total payback amount is fixed up front.
Pros & cons
- Payments scale with revenue — no cash flow squeeze in slow months
- No personal guarantee in many cases
- Funding tied to revenue trajectory, not just credit score
- Faster than SBA or bank term loans
- No fixed payoff date — you finish when you finish
- Effective cost can exceed term loans for fast-growing businesses
- Limited industries — RBF lenders prefer SaaS, e-commerce, subscription
- Strong revenue track record required
- Can't be paid off early at a discount in many structures
RBF vs Merchant Cash Advance
- RBF — Monthly repayment, % of revenue, 1.2x – 1.5x payback, modest cost
- MCA — Daily repayment, factor rate, 1.2x – 1.5x payback, higher effective APR due to faster repayment
- RBF is generally a better tool for sustainable growth; MCAs make sense only in true cash-flow emergencies
Ideal business types
- SaaS & subscription businesses with predictable MRR
- E-commerce with steady ad-driven revenue
- DTC brands at $50K+ monthly revenue
- Service businesses with recurring clients
- Founders who want to avoid taking on traditional debt
Important: Business Funding Page is a neutral advisory platform. We do not lend money. Actual rates, terms, and offers are provided by third-party lenders and depend on your specific business profile. We do not guarantee approval or specific terms.
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