Quick answer: Revenue-based financing (RBF) gives a small business capital that’s repaid as a set percentage of ongoing revenue, so payments flex up when sales are strong and down when they’re slow. It’s faster and more flexible than a term loan and generally more moderate than a merchant cash advance—best for businesses with steady, provable revenue.
Small Business Funding
Revenue-based financing sits between a rigid term loan and a high-cost merchant cash advance. Repayment moves with your sales instead of a fixed monthly amount, which protects cash flow in slow months. For small businesses with consistent revenue but imperfect credit, it’s often the most sensible flexible-capital option.
In revenue-based financing, a funder provides capital in exchange for a fixed percentage of your future revenue until a set total is repaid. Unlike a term loan’s fixed monthly payment, the dollar amount you remit rises and falls with sales—so a slow month costs you less and a strong month clears the balance faster. Approval leans on the consistency of your revenue and deposits rather than collateral or a high credit score, which makes RBF accessible to many small businesses banks decline.
RBF is often confused with a merchant cash advance. They share the pay-as-you-earn structure, but RBF is typically structured with more moderate pricing and monthly (rather than daily) remittance, making it easier on cash flow. See what revenue-based financing is for the full breakdown.
Provide a few months of bank statements or processor data.
Funding amount and repayment percentage are sized to your revenue.
Funds arrive in days—use for inventory, marketing, hiring, or a gap.
A set % of revenue is remitted until the agreed total is met.
Many businesses renew, or step up to lower-cost products as they grow.
Same goal—flexible capital—very different trade-offs.
RBF is usually priced as a premium or factor on the amount advanced—repay, say, $1.15–$1.35 per dollar—rather than an interest rate. Because repayment is a share of revenue, the effective term isn’t fixed: strong sales shorten it, slow sales extend it. Convert any offer into total dollars repaid and compare it against a term loan and, if you invoice other businesses, against factoring, which can be cheaper still.
Revenue-based financing amounts are sized to your revenue—commonly a fraction of monthly or annual sales—because repayment comes as a share of that revenue. A business doing $50,000 a month might see offers in the tens of thousands, while higher and more consistent revenue supports larger amounts. Since the funder is effectively betting on your future sales, the stability of your deposits matters more than any single credit factor, so a business with steady month-to-month revenue will usually see a stronger offer than one with the same annual total but wild swings.
The amount isn’t fixed forever, either. As you repay and demonstrate performance, renewal offers typically grow, and many businesses use RBF as a stepping stone—covering a growth push now, then graduating to lower-cost working capital or a bank line as their financials strengthen. Treating it as a bridge rather than a permanent fixture is what keeps the cost worthwhile.
RBF is a strong fit for clients who need flexibility but shouldn’t take a high-cost advance. With a signed referral agreement, you can submit a business for evaluation and the financing partner matches it to RBF or a better-priced option—you earn revenue share when it funds. Send a deal for review.
FAQ
A funder advances capital in exchange for a fixed percentage of your future revenue until a set total is repaid. Because you remit a share of sales rather than a fixed payment, the amount flexes with your revenue—less in slow months, more in strong ones.
They share a pay-as-you-earn structure, but RBF is typically structured with more moderate pricing and monthly remittance, while an MCA is usually repaid from daily or weekly sales at a higher factor rate. RBF is generally easier on cash flow.
It is usually priced as a premium on the amount advanced—repaying roughly $1.15–$1.35 per dollar—rather than an interest rate. Because repayment is a share of revenue, the effective term varies with your sales. Always convert an offer into total dollars repaid.
Approval is driven mainly by consistent revenue and bank deposits rather than collateral or a high credit score. Most funders want a few months of history and steady sales; many approve businesses banks decline.
It is structured as a purchase of future revenue rather than a traditional loan, though it functions like flexible financing. Terms and how it appears on your books vary by funder—review the agreement carefully.
Yes. With a signed referral agreement, a broker or advisor can submit a business for evaluation and earn revenue share when it funds. The financing partner may place it as RBF or a lower-cost product; approval and terms are not guaranteed.
Have a deal to place?
Review the referral agreement, sign it, and submit opportunities for evaluation.
