Commercial Finance Education
Revenue-based financing is funding where repayment is tied to a percentage of the business's daily or monthly revenue. As revenue goes up, payments go up; as revenue goes down, payments go down. It is an alternative structure for businesses with consistent revenue that may not fit traditional bank criteria.
Traditional loans require fixed monthly payments. Some businesses have strong revenue but weaker credit or do not fit bank criteria. Revenue-based financing offers a structure where repayment flexes with revenue—potentially creating options where traditional lending does not.
The lender advances funds and receives a percentage of daily or monthly revenue until a predetermined amount is repaid. The percentage and total repayment vary by lender and deal. This structure can suit businesses with predictable revenue streams—retail, restaurants, e-commerce, professional services—that need working capital or growth funding.
Brokers and advisors often encounter clients who were declined by a bank but have solid revenue. Those declined deals may be eligible for second look through a referral partner network. No approval is promised; each deal is evaluated on its merits.
Key differences brokers and advisors should understand:
Businesses with predictable revenue—retailers, restaurants, e-commerce, SaaS, professional services, healthcare practices—often consider revenue-based financing. It can suit companies that need working capital or growth funding but do not qualify for bank loans due to credit, time in business, or industry.
Eligibility varies by lender. Revenue volume, consistency, time in business, and industry are typical factors. Deals declined by one source may be evaluated differently elsewhere. Brokers with a signed referral agreement can send declined business loans for review.
Restaurant expansion. A restaurant has strong monthly revenue but was declined by a bank due to industry or credit. Revenue-based financing may provide working capital for a second location, with repayment tied to daily sales.
E-commerce inventory. An online retailer needs inventory for the holiday season. Revenue is strong but uneven. Revenue-based financing may fund the purchase with repayment as a percentage of monthly sales.
Professional services firm. A consulting firm has consistent revenue but newer credit history. A bank declined a working capital request. Revenue-based financing may create an option depending on revenue and structure.
Declined by MCA shop. A business was declined by one revenue-based or MCA-style lender. A broker refers the deal to a referral partner for second look. Different lenders have different guidelines; the deal may be evaluated elsewhere.
Brokers refer revenue-based deals when they fall outside their primary lender box. CPAs and consultants refer clients who were declined by a bank but have solid revenue. Vendors refer customers who need working capital. The common thread: a need for a different evaluation than the first lender provided.
Second look is not a guarantee. Send declined business loans and hard-to-place revenue-based deals through the referral process. Review the referral agreement before submitting. See declined deals for more on how these situations are handled.
Submit borrower and request details by email.
We evaluate the opportunity and identify possible funding paths based on multiple factors.
Partners stay informed throughout the process.
When a deal closes, partners may receive 35% revenue share per the agreement.
FAQ
Revenue-based financing is funding where repayment is tied to a percentage of the business's daily or monthly revenue. As revenue fluctuates, payments fluctuate. It is often used by businesses with consistent revenue streams that may not qualify for traditional bank financing.
Traditional loans have fixed monthly payments. Revenue-based financing has payments that vary with revenue—higher revenue means higher payments; lower revenue means lower payments. Structure and eligibility criteria differ from bank loans.
Businesses with predictable revenue—retail, restaurants, e-commerce, SaaS, professional services—often consider it. Eligibility depends on revenue volume, consistency, and structure. Different lenders have different criteria.
Yes. Brokers, vendors, CPAs, and advisors with a signed referral agreement can submit declined revenue-based financing deals for second look review. The financing partner evaluates the opportunity; no approval is guaranteed.
Revenue volume, consistency, time in business, industry, and deal structure. Lenders evaluate whether the revenue stream can support the repayment percentage. Credit may be a factor but is often weighted differently than in traditional lending.
Referral partners submit declined deals through the referral partner process. Review the referral agreement first, then send deal details. See send declined business loans and declined deals for more information.
Have a declined revenue-based financing deal?
Review the referral agreement, sign it, and submit opportunities for evaluation.
