Revenue based financing

Revenue based financing gives you a lump sum that you pay back by sharing a fixed percentage of your monthly revenue until you have returned an agreed total, which is the original amount plus a flat fee. Because payments rise and fall with your sales, you pay more in strong months and less in slow ones, which eases pressure when business dips. There is no fixed maturity date in the traditional sense; the financing ends when the agreed total is repaid. Approval leans on your revenue history and consistency, especially recurring or card based sales, more than on credit score or collateral.

This fits businesses with steady, measurable revenue, such as subscription or ecommerce companies, that want funding without giving up equity or pledging assets. The flexibility of payments tied to sales is the main draw, but the flat fee can translate to a high effective cost if you repay quickly, so compare the total payback against a term loan. Note that revenue based financing is a financing arrangement distinct from a merchant cash advance, which is a purchase of future receivables, not a loan. Read the agreement closely to understand the percentage, the total owed, and any minimum payment terms.