Revenue-based financing
The promise of revenue-based financing is a payment that follows sales. Here is how that works in practice and what to check.
✓ Checking what you qualify for does not affect your credit score.
Short answer: Some agreements collect a true percentage of each deposit or each period's revenue, so the payment changes automatically. Others set an estimated fixed payment from average revenue and adjust it through reconciliation when actual revenue differs. Both work, but in a sudden slow month the true percentage adjusts immediately while the estimate waits for a request.
Key facts
Related: Revenue-Based Financing in Canada: How It Works · Revenue-Based Financing Calculator (Canada) · Revenue-Based Financing Cost Examples (CAD) · Revenue-Based Financing Requirements in Canada · Merchant Cash Advance vs Revenue-Based Financing
Some agreements collect a true percentage of each deposit or each period's revenue, so the payment changes automatically. Others set an estimated fixed payment based on average revenue and adjust it through a reconciliation when actual revenue differs. Both can work, but they behave differently in a sudden slow month.
| Method | How it works | In a slow month |
|---|---|---|
| Percentage of actual revenue | Payment calculated from real revenue each period | Payment falls automatically |
| Estimated payment with reconciliation | Fixed estimate, adjusted on request with statements | You request an adjustment and provide proof |
Suppose a business normally earns $60,000 a month and pays 8%, about $4,800. In February revenue falls to $40,000. Under a true percentage, the payment becomes $3,200. Under an estimated payment, it stays at $4,800 until the business asks for a reconciliation and shows the lower revenue, after which the payment is adjusted and any overpayment credited according to the agreement.
In a strong month the payment rises, which shortens the time to reach the cap. Some owners choose to keep the share modest so that a strong month funds reinvestment rather than an accelerated payoff. Think about what you want the busy months to do before choosing the share.
Next step: apply once with a signed application and your last four months of business bank statements. The file is read for how RBF payments adjust 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.
Under some agreements, yes. Under others you must request it. Check before signing.
If the payment is a true percentage and revenue is zero, the payment is zero, but read the agreement for minimums and default terms.
A single slow month with prompt communication is normal. Missed payments without contact are what hurt.
Educational information only. It is not legal, tax or accounting advice.
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