Revenue-Based Financing

Partner with Expansion Capital Group on Revenue-Based Financing for your continued business success.

 

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What is Revenue-Based Financing and how does it work?

Revenue-Based Financing (RBF) is a funding model where a business sells a specified percentage of its future receivables for a discounted purchase price. It is a form of alternative financing that offers a flexible and performance-based approach. Unlike traditional fundings with fixed monthly payments, revenue-based financing ties the repayments to the business’s ongoing revenue streams.

Revenue-based financing is often attractive to businesses with uneven revenue streams that may not have the assets or credit history to secure traditional loans or fundings. It provides a more flexible and collaborative approach to financing, aligning the interests of the business and the purchaser.

Flexible

weekly/daily remittances

Scalable

Offers from
$5K-$300K

Dependable

over 20,000
small businesses funded

What are the advantages of getting Revenue-Based Financing?

  • 1

    Repayment Structure
    The business agrees to remit a percentage of its monthly revenues to the funder.

  • 2

    No Maturity Date
    The Purchase and Sale transaction continues until the amount of the obligation undertaken is satisfied.

  • 3

    Equity-Free Financing
    A form of financing that does not require a pledge or sale of business equity.

  • 4

    Risk for Funders
    Investors take on more risk than traditional lenders because the return is directly linked to revenue performance.

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Minimum Requirements for Revenue-Based Financing.

Revenue-based financing can be highly beneficial financing option for businesses seeking flexibility and performance-based funding

  • 6+ Months in business
  • Fair/Good credit score
  • $100k annual revenue
  • U.S. Based business locations

What can Revenue-Based Financing be used for?

Operational Improvements
Technology Investments
Strategic Acquisition
Business Expansion

How small businesses have used Revenue-Based Financing.

Small businesses have increasingly turned to revenue-based financing as a flexible and accessible funding solution. Unlike traditional loans, revenue-based financing arrangements allow businesses to secure capital without sacrificing equity or facing stringent credit requirements. Instead, financing is provided based on the company’s future revenue streams, with repayments tied directly to ongoing sales. This model aligns the interests of the business and the financier, as repayments fluctuate with revenue performance, providing breathing room during slower periods and scaling up with growth.

Small businesses have utilized revenue-based financing to fund various initiatives, including expansion projects, marketing campaigns, inventory purchases, and hiring efforts, enabling them to capitalize on opportunities for growth while maintaining financial flexibility. With its adaptable structure and focus on revenue generation, revenue-based financing has emerged as a valuable tool for small businesses seeking to navigate the challenges of scaling operations and achieving sustainable growth.

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FAQ’s

  • What is Revenue-Based Financing?
    Revenue-based financing offers small businesses capital through the purchase of the future receivables of a business linked to a fixed percentage of its monthly gross revenues. Remittances of the percentage of receivables fluctuate based on the business’s monthly revenue, providing flexibility as their earnings fluctuate.
  • What are the pros and cons of Revenue-Based Financing?
    – Pros:
    Flexible remittance schedule as revenues fluctuate
    No repayment guaranty even if the business fails or files bankruptcy
    Capital for growth that is easy to obtain and has no fixed term of repayment
    – Cons:
    Remittances are typically daily or weekly and debited via ACH
    Pricing will vary based primarily on business risk profile
    If the business’ revenue increases, then remittances may increase
  • How do I apply for Revenue-Based Financing?
    Apply directly on the ECG website or call to speak directly to one of our funding specialists at (provide number)
  • What do I need to know before I apply for Revenue-Based Financing?
    Minimum qualifications: a U.S. based small business with a business bank account, a minimum of 6 months in business, and at least $8,000 a month in revenue; additional underwriting criteria will apply.
  • When should my business consider Revenue-Based Financing as an alternative?
    – If you are a small business with few fixed assets
    – If you have immediate short-term capital needs and prefer the variable nature of remittances with this product
    – If you own a business which is “project-based” and produces a fluctuating revenue stream