# Revenue-Based Financing for Franchise Owners

> Revenue-based financing for franchise owners with seasonal or uneven units: payments sized to revenue, Tier 2 requirements, CA and NY rules, and how it differs from MCA.

Source: https://mfebusinessloans.com/franchise-funding/revenue-based-financing/ (Merchant Fund Express, updated 2026-10-21)

## The short answer

Revenue-based financing from Merchant Fund Express gives an operating franchise unit capital now, repaid from a share of revenue or fixed payments sized to revenue. It is not a loan. It fits seasonal and uneven units, such as a beach-town smoothie shop, a tax-season service office or a summer-heavy ice cream unit, that land in Tier 2: 6+ months open, FICO 600+ and $60K in verifiable revenue.

## Which franchise units benefit from payments sized to revenue?

Any unit where a strong month and a weak month look very different on the bank statement. Typical examples:
Smoothie, frozen dessert and beverage units in tourist or college towns (see smoothie franchises and dessert franchises).
Lawn, pool and outdoor home service franchises with a short peak season (home service franchises).
Tutoring and kids' activity units that dip in summer.
Hotels with an off season (hotel franchises).
For the deeper seasonal planning angle, read franchise seasonal cash flow.

## What are the requirements?

Tier 2 item | Published requirement |
Time in business | 6+ months |
Credit | FICO 600+ (scores from 500 are considered) |
Revenue | $60K verifiable |
Balance | Minimum daily balance $800 |
Negative days and NSFs | At most 5 |
Current advances | Up to 2 |
History | No open bankruptcies, no prior defaults |
States | All 50; California and New York carry extra restrictions |
The general product page is revenue-based financing.

## How does Merchant Fund Express size RBF for a seasonal unit?

We look at the full statement period, not just the best month. Royalty and advertising-fund debits are read as normal recurring costs; because most royalties are a percentage of sales, they shrink in slow months too, and the review accounts for that. The financing is sized so the slow-month payment still fits after royalties, rent and payroll. Owners with more than one unit get each entity reviewed on its own deposits.

## Worked example: a smoothie unit with a summer peak

A hypothetical smoothie franchise unit deposits $52,000 in a peak month and $26,000 in a slow month. It takes $35,000 in revenue-based financing with a hypothetical total repayment of $44,800, collected at 8% of deposits.
Line | Figure |
Peak month payment | $52,000 x 8% = $4,160 |
Slow month payment | $26,000 x 8% = $2,080 |
Cost of the financing | $44,800 - $35,000 = $9,800 |
Average month (half peak, half slow) | ($4,160 + $2,080) / 2 = $3,120 |
Estimated months to complete | $44,800 / $3,120 = about 14.4 months |
A fixed daily debit would take the same dollars in January as in July. Here the January payment is half the July one.
Figures in this example are illustrations of the arithmetic, not an offer, quote or approval. Real terms depend on the file and the funder.

## How is RBF different from a merchant cash advance?

Both are purchases tied to future revenue and neither is a loan. The difference is the payment shape: an MCA usually debits a fixed daily or weekly amount, while revenue-based financing follows a share of revenue or fixed payments sized to revenue. Steady card-heavy units often prefer the merchant cash advance for franchise owners; uneven units lean RBF. The full comparison is on revenue-based financing vs MCA.
Is your slowest month under 60% of your best? Lean RBF.
Are deposits flat week to week? An MCA may cost less.
Do you have 3+ years and FICO 650+? Compare a term loan too.

## What about California and New York franchise owners?

Merchant Fund Express funds revenue-based financing in all 50 states. California and New York carry extra restrictions, so files there include additional disclosures and may take a few more questions. Apply the same way; the review explains what applies to your unit. Terms depend on the business's revenue and history.

## What should a seasonal franchise owner send, and when?

Timing matters more for a seasonal unit than for any other franchise. Apply as the slow season begins, while the statements still show the peak months, rather than in the deepest part of the dip. The file itself is short:
The 5-minute application, with a soft credit pull to start.
About 3 months of business bank statements for the unit's entity; add older months if they show the peak.
A short note on the season: when it starts, when it ends, what the money covers (inventory, staff, a pre-season refresh).
Any current advance or equipment payment, so it is counted up front.
Full checklist: franchise documents. Owners who need the capital for stock before the busy months can also read franchise inventory funding.

## Keep reading

Franchise business loans: All products for existing owners.
Revenue-based financing vs MCA: Payment shape compared in detail.
Franchise seasonal cash flow: Planning for the slow months.
Franchise funding requirements: Tier 1 and Tier 2 tables.
Apply in about 5 minutes: Soft credit pull to start.

## Common questions

### Is revenue-based financing a loan?

No. It is repaid from a share of revenue or fixed payments sized to revenue, not on a loan schedule.

### Can a unit open for 8 months apply?

Yes. Tier 2 starts at 6 months in business.

### Will a slow season on my statements hurt?

No. Seasonality is expected. Merchant Fund Express sizes the financing so the slow-month payment fits.

### Do royalties count against me?

They are read as normal recurring costs, and payment capacity is sized after them.

### Can I run the numbers myself?

Yes. Use the revenue-based financing calculator with your own peak and slow months.

### How fast is it?

Same-day decision on a complete file; funding often the next business day.

Apply with Merchant Fund Express: https://merchantfundexpress.com/current-application.html?utm_source=mfebusinessloans.com&utm_medium=franchise&utm_campaign=franchise-funding&utm_content=revenue-based-financing