Revenue-based financing

Revenue-based financing for ecommerce brands: inventory now, repaid from sales.

Online brands pay for stock and ads weeks before customers pay them. A revenue-based advance closes that gap and slows down when sales do.

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How do e-commerce brands use revenue-based financing?

Short answer: A direct-to-consumer brand pays a manufacturer deposit and balance, freight and duties, then funds the ads that sell the stock, while revenue arrives over weeks through platform payouts. Revenue-based financing covers that gap and is repaid as a share of sales, so a slower sell-through means smaller payments.

Key facts

Inventory, freight and ads come before sales
Payments follow platform payouts
Bigger orders mean bigger gaps
Fund stock with a known sell-through

The ecommerce cash gap

A direct-to-consumer brand typically pays a manufacturer a deposit, pays the balance before shipment, pays freight and duties at the border and then funds the ads that sell the stock. Revenue comes in over the following weeks through platform payouts. The bigger the next order, the bigger the gap, which is why growing brands are often cash-short exactly when demand is strongest.

A revenue-based advance is repaid as a share of the sales that the inventory produces. In a month when a product line sells through quickly, the payment is larger and the advance is cleared sooner. In a slow month the payment shrinks, which protects the cash needed for the next purchase order.

What the review looks at

Platform and payment-processor payouts into the business account, and the delay between sale and payout.
Gross margin after cost of goods, shipping and platform fees, because thin margins leave less room for any repayment.
Advertising spend relative to revenue and how stable that ratio has been.
Return rates in categories such as apparel, where refunds can be large.
Concentration on a single marketplace, which adds platform risk.

Canadian details that matter

Brands that import pay GST/HST and sometimes duty at the border before goods are sold, and the Canada Border Services Agency's accounting and payment rules apply to commercial shipments. That cash leaves weeks before revenue arrives. Selling into the United States adds currency conversion and cross-border shipping costs. A funder reading your statements will see these outflows; a note explaining the timing of a large purchase order or duty payment helps the file read correctly.

If you hold inventory in a third-party warehouse, include the fulfilment invoices so the reviewer understands the cost structure.

Using the money well

Fund a purchase order you can already sell through, ideally a proven product line.
Keep the share of revenue at a level that still leaves cash for the next reorder.
Do not use a short advance for brand-building spend whose return is unclear; match the tool to measurable revenue.

A worked example

Illustrative arithmetic: a DTC brand with $80,000 monthly sales

Advance: $60,000. Repayment cap: $60,000 × 1.20 = $72,000.
Cost of the capital: $12,000, fixed in dollars from the start.
Payment: 12% of monthly revenue. At $80,000 a month that is $9,600, so about 7.5 months to reach the cap.

Every figure on this page is illustrative arithmetic in Canadian dollars. It is not an offer, a quote or a promise of approval.

Where Canadian files usually start

Monthly revenueTypically from around $20,000 a month in deposits for Canadian files. The exact line varies by funder and by file.

Time in businessTypically about 12 months. Newer businesses can be reviewed, but the options narrow.

Account healthLimited low-balance or negative days. Funders read the last few months of bank statements for this.

CreditScores from 500 are considered. A score of 600 or higher opens more options and better offers.

DocumentsA signed application and recent business bank statements, typically the last four months.

Existing advancesFiles with an existing advance can be reviewed, including second position.

Next step: apply once with a signed application and your last four months of business bank statements. The file is read for rBF for ecommerce brands 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.

Sources and review

Reviewed by the Merchant Fund Express team on October 12, 2026. Official pages checked as of that date.

Common questions

Do marketplace payouts count as revenue?

Yes. Payouts from Shopify, Amazon and other platforms that land in the business account are read as deposits.

Can I use it for inventory and ads together?

Yes, as long as the plan is clear and the payment leaves room for the next order.

Is a platform's own financing offer better?

Sometimes it is convenient. Compare total payback in dollars and the share of sales, and note that a deposit review sees revenue from every channel, not just one platform.