Financing that scales with your sales.
Revenue-based loans use a fixed percentage of your monthly revenue for repayment — smaller payments when sales are slow, larger when sales are strong.
What revenue-based financing actually is
Revenue-based financing (RBF) is a hybrid between a term loan and a merchant cash advance. The funder gives you a lump sum upfront, and you repay a fixed percentage of monthly revenue until an agreed total is repaid.
Unlike a merchant cash advance — which is tied to card sales only — revenue-based financing is tied to your total business revenue across all payment methods. That makes it a better fit for B2B businesses or any business where card sales are only part of the picture.
Because monthly repayment scales with revenue, slow months cost you less. The trade-off is that fast growth shortens the repayment period and effectively raises your APR.
How revenue-based financing works
You apply with 6 months of business bank statements. The funder analyzes your average monthly revenue, then offers an advance amount with a factor rate (typically 1.20–1.50) and a holdback percentage (the share of monthly revenue routed to repayment, typically 5–15%).
After you accept, funds deposit to your business account within 1–2 business days. Repayment runs as automatic ACH debits against your business account — typically monthly, sometimes more frequent.
Many businesses use RBF as alternative growth capital — for marketing, inventory, hiring, or expansion — without giving up equity or signing long-term debt obligations.
What to weigh before you apply.
Pros
- Repayment flexes with your revenue: lighter on slow months
- No fixed monthly payment to break during a downturn
- Available for businesses that don't accept card payments
- No equity dilution — you keep 100% ownership
Cons
- Higher cost of capital than traditional loans
- Fast growth shortens repayment and raises effective APR
- Personal guarantee typically required
- Less common than MCAs — fewer lender options in some industries
How it stacks up against other funding products.
Questions before you apply.
How is this different from a merchant cash advance?
An MCA repays from a percentage of card sales. Revenue-based financing repays from a percentage of total revenue — including ACH, wire, check, and card. RBF is the better fit when card sales are only a fraction of your business.
Can I pay off early?
You can, but the total repayment is fixed by the factor rate so early payoff doesn't save interest. Some funders offer early-payoff discounts — we surface those when available.
What revenue level do I need to qualify?
Most funders look for at least $15K–$25K per month in average revenue and 6+ months in business. Below that, options narrow.