Revenue-based financing

Most financing takes the same payment out of the account every time, whether you just had your best month or your worst. Revenue-based financing works the other way around: the payment follows the revenue.

What it is

Revenue-based financing advances working capital that’s repaid as a share of what the business actually brings in. Instead of one fixed payment on a fixed calendar, remittance is tied to revenue: in a strong month, more goes toward the balance and you finish sooner; in a slow month, the payment shrinks along with the revenue. The share itself is set up front — a set percentage of revenue, agreed before you sign, with the percentage depending on how the file looks.

How it differs from a fixed payment

A fixed-term product is built for steady, predictable revenue — the same payment lands every period, and for a business with a flat revenue line that’s exactly right. But plenty of healthy businesses don’t have a flat line. Their revenue arrives in waves: a landscaping company’s spring, a marine outfit’s winter season, a project shop’s big-invoice months. For a business like that, a fixed payment is sized wrong twice a year — too light to matter in the strong months, too heavy in the slow ones.

• Fixed payment: the same amount every time, regardless of the month you just had.
• Revenue-based: the remittance follows revenue — heavier when business is strong, lighter when it’s slow.

Neither is better in the abstract. The question is which one matches the shape of your revenue — and that’s a question the review desk answers by looking at your real numbers, not by guessing.

How much, and how fast

Programs typically range up to 2X your monthly revenue, depending on how the file looks. Decisions typically come within one business day of a complete file, and no documents are needed to see your options. Before you sign, you’ll see the percentage, the total to repay, and how remittance works — in plain terms.

Who it fits

• Seasonal businesses — landscaping, marine services, tourism-area retail — whose strong months carry the slow ones.
• Project-based companies whose revenue arrives in waves rather than a straight line.
• Fast-growing businesses that don’t want a payment sized to last year’s smaller numbers.
• Owners who’ve been turned away from fixed-term products because their revenue is uneven — not weak.

If your revenue is steady and predictable, a fixed-term structure may cost less over the life of the file — see working capital programs. If the real problem is invoices that pay in 30–90 days, look at invoice factoring first.