What Is Revenue-Based Financing?
Revenue-based financing (RBF) provides upfront capital in exchange for a percentage of future monthly revenues until a predetermined repayment cap is reached. Unlike an MCA (which draws from daily card sales), RBF repayments are based on total monthly revenue from all sources — making it flexible during slow months.
How Revenue-Based Financing Works
Example: $200,000 in RBF capital with a 1.35x repayment cap = $270,000 total repayment. If your monthly revenue is $100,000 and the revenue share rate is 8%, you’d pay $8,000/month — repaying the full amount in approximately 33 months. If revenue drops to $50,000, your payment drops to $4,000. If revenue surges to $200,000, you’d pay $16,000 and repay faster.
RBF vs. Traditional Loan vs. MCA
| Factor | RBF | Term Loan | MCA |
|---|---|---|---|
| Repayment Structure | % of total revenue | Fixed monthly | % of daily card sales |
| Collateral | None typically | Often required | None |
| Equity Dilution | None | None | None |
| Speed | 3–10 days | 1–60 days | 24–72 hours |
| Best For | Recurring revenue businesses | Established with collateral | High card volume |
Who Qualifies for Revenue-Based Financing
- Businesses with $10,000+ in monthly recurring revenue
- SaaS companies, e-commerce, subscription businesses, and service firms
- Credit scores from 580+ (less emphasis on credit, more on revenue quality)
- 6+ months in business
- Consistent, predictable revenue stream