Revenue-Based Financing
Funding that flexes with your sales. Pay more when business is good, less when it's slow — repayment is a fixed percentage of monthly revenue, not a calendar.
What is revenue-based financing?
Revenue-based financing (RBF) is a funding structure in which the business receives a lump sum of capital and repays it as a fixed percentage of monthly revenue, rather than a fixed monthly payment. Repayment continues until a pre-agreed total — typically 1.2x to 1.5x the original advance — has been delivered.
RBF is most popular with e-commerce brands, SaaS businesses, subscription businesses, and other operators with strong unit economics but variable monthly revenue. Because payments scale with sales, RBF avoids the cash-flow stress of a fixed monthly debt payment during a slow month.
RBF is similar in spirit to a merchant cash advance (MCA), but it's typically structured as a true loan with monthly remittance against revenue rather than daily ACH against deposits or card receivables.
How it works
- 1
Connect your data
Lenders pull bank, payment processor, or e-commerce platform data (Shopify, Stripe, Amazon) to underwrite your trailing revenue.
- 2
Receive an offer
You're presented with an advance amount, a fixed payback total (e.g., 1.3x), and a monthly remittance percentage (e.g., 8% of revenue).
- 3
Funds wire to your account
Capital is deployed in 1–3 business days.
- 4
Repay as a percentage of revenue
Each month, the lender draws the agreed percentage of revenue until the payback total is met. Strong months pay it down faster; weak months pay less.
Key details
Qualifications
- 6+ months of consistent revenue history
- Connected payment processor or platform data (Shopify, Stripe, Amazon, etc.)
- Personal credit typically not the primary driver
- U.S.-based business with active operations
Pros and cons
Pros
- Payments scale with revenue — no fixed monthly stress
- Fast funding (often within 48 hours)
- Less paperwork than traditional debt
- No equity given up — fully non-dilutive
- Approval based on revenue, not personal credit
Cons
- Higher cost than SBA or bank term debt
- Total payback is fixed regardless of speed
- Best for businesses with strong, traceable revenue streams
- Stacking multiple advances can quickly become unmanageable
How it compares
Side-by-side comparison of small business funding options.
| Product | Speed | Cost | Term | Best for |
|---|---|---|---|---|
| SBA 7(a) | 30–90 days | Prime + 2.25–4.75% | Up to 25 yrs | Largest, lowest-cost capital |
| Business Line of Credit | 1–3 weeks | 8–25% APR | Revolving 1–3 yrs | Ongoing flexibility |
| Term Loan | 1–2 weeks | 10–30% APR | 1–10 yrs | One-time investments |
| Working Capital | 1–3 days | 1.10–1.40 factor | 3–18 mo | Speed and minimal docs |
| MCA | Same day–48 hrs | 1.15–1.50 factor | 3–12 mo | Lowest credit / fastest funding |
| Equipment Financing | 1–7 days | 7–25% APR | Useful life of asset | Equipment-secured purchases |