Revenue-based financing
Cost is set by the multiple. Speed of repayment is set by the revenue share and how fast you grow. These examples show both.
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Short answer: The cost in dollars is the cap minus the advance, and it does not change with time. A $40,000 advance at a 1.2 multiple has a $48,000 cap and an $8,000 cost. What changes is how long repayment takes, which depends on the revenue share and how much revenue the business earns.
Key facts
Related: Revenue-Based Financing in Canada: How It Works · Revenue-Based Financing Calculator (Canada) · Revenue-Based Financing Requirements in Canada · Merchant Cash Advance vs Revenue-Based Financing
A revenue-based advance has a fixed total repayment, often called the cap, calculated by multiplying the advance by an agreed multiple. The cost of the capital in dollars is the cap minus the advance, and it does not change with time. What changes is how long it takes to reach the cap, which depends on the share of revenue paid and how much revenue the business earns.
This is the most important difference from a loan: with a loan, paying slower costs more interest. With revenue-based financing at a fixed cap, paying slower costs the same in dollars, but the annualized cost is lower because the money is held longer.
| Scenario | Advance | Multiple | Total repaid | Share | Monthly revenue | Approx. months |
|---|---|---|---|---|---|---|
| Steady clinic | $50,000 | 1.18 | $59,000 | 6% | $120,000 | 8.2 |
| Growing online brand | $40,000 | 1.20 | $48,000 | 12% | $60,000 rising | under 6.7 |
| Seasonal landscaper | $30,000 | 1.22 | $36,600 | 10% | $45,000 average | 8.1 |
| Agency | $25,000 | 1.20 | $30,000 | 8% | $55,000 | 6.8 |
The growing brand reaches its cap sooner than the table shows because revenue rises each month. The landscaper pays more in summer and less in winter, so most of the repayment falls in the busy months.
To compare with a loan, work out the total dollars repaid on each offer and the expected time to repay. A loan quoted at an annual rate may cost less in total over the same period, but it brings a fixed payment that does not ease in a slow month. The right choice depends on how much flexibility is worth to your business.
Next step: apply once with a signed application and your last four months of business bank statements. The file is read for rBF cost examples and matched to the structure that fits, whether that is revenue-based financing, a merchant cash advance or a smaller first advance that builds history. Questions first? Call (305) 384-8391.
Reviewed by the Merchant Fund Express team on October 12, 2026. Official pages checked as of that date.
For the same advance and share, yes. But compare the whole offer, including fees and payment flexibility.
Because a fixed dollar cost spread over a short time gives a high annualized figure. Look at total dollars too.
Yes. Use the revenue-based financing calculator with your own numbers.
Educational information only. It is not legal, tax or accounting advice.
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