Glossary
Funding repaid as a fixed percentage of revenue until a multiple is reached.
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Funding repaid as a fixed percentage of revenue until a multiple is reached.
The business receives funds and repays a fixed multiple through a percentage of revenue. Payments rise and fall with revenue.
It aligns payment with performance.
A 1.2 multiple on $40,000 is $48,000, repaid at 8% of monthly revenue.
It suits recurring or seasonal revenue.
A revenue-based file is read for revenue stability and the mix of channels. Reviewers want to see that the percentage taken can be sustained in a slow month, so they run the numbers at lower revenue before settling on a multiple and a rate.
Revenue-based does not mean there is no cost. The multiple is fixed, and only the timing flexes.
Borrow $40,000 at a 1.18 multiple and the payback is $47,200. At 8% of monthly revenue and $50,000 a month in sales, you pay $4,000 a month and finish in about twelve months. In a $30,000 month the payment falls to $2,400, and the same balance takes longer.
Not by default. Compare total dollars.
See the related guides and the comparison pages, or apply and ask.
No. It is educational information, and agreements vary.
Educational information only. It is not legal, tax or accounting advice.
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