What is Revenue Based Financing?
Revenue-based financing (RBF) is a method for businesses to raise capital by exchanging an upfront sum of money for a fixed percentage of their future gross revenues. The lender gives you the capital upfront; a percentage is deducted when the money comes into your business in the future. It is a non-dilutive form of financing — founders do not give up equity or ownership control of their company.
How It Works
- Upfront Capital: A financing provider gives the business a lump sum of capital.
- Repayment Percentage: The business agrees to pay a set percentage (typically daily or weekly) of its ongoing gross revenue to the provider.
- Payment Fluctuation: In high-revenue periods, payments are larger. In low-revenue periods, payments are smaller — easing cash flow pressure.
- No Personal Guarantee: RBF typically does not require personal assets as collateral.
✓ Pros
- Flexible payments adjust to your cash flow
- No equity dilution — retain full ownership
- Faster funding than traditional bank loans
- Easier to qualify — based on revenue, not credit scores
Best For
- Consistent, predictable revenue streams
- SaaS and e-commerce businesses
- Seasonal businesses needing flexible payments
- Inventory expansion and marketing campaigns
Who Is It Best For?
RBF is well-suited for businesses with a consistent, predictable revenue stream that need capital for growth opportunities like purchasing inventory, funding marketing campaigns, or expanding a product line. It is especially popular in SaaS and e-commerce industries due to their recurring revenue models.
Will not affect your business or personal credit scoreLet Our Expert Financial Engineering Help You Secure Favorable Terms Tailored to Your Business's Current Situation.