Revenue-based financing

Revenue-based financing for subscriptions: recurring revenue, flexible repayment.

Boxes, memberships and service plans bill on a calendar. That predictability is what a revenue-based funder reads.

✓ Checking what you qualify for does not affect your credit score.

How do subscription businesses use revenue-based financing?

Short answer: Subscription businesses produce deposits on known dates from the same customers month after month, which makes the account easy to read. Revenue-based financing turns that predictability into capital without a fixed instalment, funding inventory, acquisition or new products, with payments that ease if churn rises.

Key facts

Deposits arrive on known dates
Same customers pay month after month
Churn and growth are read together
No fixed instalment

Why recurring billing reads well

Subscription businesses produce deposits on known dates, which makes the account easy to read. A meal-kit company, a coffee subscription, a software-plus-service plan or a membership club can show the same customers paying month after month. Revenue-based financing turns that predictability into capital without a fixed instalment.

Unlike a software company, many subscription businesses carry physical costs: product, packaging and fulfilment. That makes gross margin and the timing of supplier payments as important as the subscriber count.

Churn, pauses and seasonality

Subscribers cancel and pause. Holiday gifting can produce a spike of new subscriptions in December followed by higher cancellations in February. A funder reading twelve months will see that curve; explaining it saves time.

Separate one-time gift subscriptions from recurring subscribers in your notes.
Point out any price change, which can shift revenue without changing subscriber count.
Explain failed-payment retries, which can make deposits arrive in clusters.

Good uses of the capital

Building inventory before a seasonal subscriber push.
Acquisition campaigns where you know the cost per subscriber and the average lifetime.
Packaging or fulfilment upgrades that reduce cost per box.
Bridging a supplier who requires payment before delivery.

Size the advance so the payment at the agreed share still covers the next fulfilment cycle in your slowest month.

A worked example

Illustrative arithmetic: a subscription box company with $45,000 monthly deposits

Advance: $35,000. Repayment cap: $35,000 × 1.20 = $42,000.
Cost of the capital: $7,000, fixed in dollars from the start.
Payment: 10% of monthly revenue. At $45,000 a month that is $4,500, so about 9.3 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 subscription businesses 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

Statistics Canada: Subjects (business and industry data)

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

Common questions

Does churn disqualify a subscription business?

No. Every subscription business has churn. The review looks at whether deposits are stable or growing despite it.

Are annual prepaid plans a problem?

They are fine, but they inflate the month they are billed. Point them out so they are not read as monthly revenue.

How is the payment collected?

As an agreed share of revenue, typically collected from the business account on a regular schedule.