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A microloan is small, slow and cheap. Revenue-based funding is larger, fast and priced for speed. Picking between them comes down to how much you need, how soon, and what your bank activity looks like.
✓ Checking what you qualify for does not affect your credit score.
Updated October 13, 2026 · Merchant Fund Express
Microloans are usually the better fit for a very young or pre-revenue business that needs a small amount, can wait weeks, and benefits from the coaching many microlenders attach. Revenue-based funding fits an operating business with steady deposits that needs a larger amount quickly and can carry a payment tied to its sales.
They rarely compete for the same owner. If you have six months of steady deposits and need $25,000 or more this month, a microloan program is unlikely to move fast enough. If you are three months old with thin deposits, revenue-based funding will not be the answer yet.
| Microloan | Revenue-based funding | |
|---|---|---|
| Typical amount | Small, often well under $50,000 | $25,000 to $5,000,000 through us |
| Who offers it | Nonprofit and community lenders, some government-backed programs | Private funders reviewing bank activity |
| Speed | Weeks, often with classes or mentoring first | Same-day decisions on complete files; funding in as little as 24 hours for qualified businesses |
| What is reviewed | Business plan, credit, character, sometimes collateral | Bank statements, time in business, credit (500+ considered) |
| Cost | Generally lower | Higher, priced for speed and flexibility |
| Repayment | Fixed monthly installment | Daily or weekly, fixed or tied to sales depending on the agreement |
A two-chair barbershop needs $20,000 to add two stations. It has 8 months of history and about $14,000 a month in deposits.
| Microloan path | Revenue-based path | |
|---|---|---|
| Amount | $20,000 | $25,000 minimum through us |
| Time to cash | 4 to 8 weeks including a workshop | About a week from application, once statements are complete |
| Repayment | About $640 a month over 36 months | Weekly debits; the full payback is set in the offer before you sign |
| Fit | Strong: small amount, can wait | Weak: request is below our range and the file is young |
Here the microloan wins. Now change the facts: the shop is 2 years old, deposits are $60,000 a month, and a third location lease must be signed in 10 days for $90,000 of buildout. A microloan cannot reach that amount or that timeline, and revenue-based funding is the realistic tool.
All figures in worked examples are illustrations of the arithmetic, not offers or quotes. Real terms depend on your file and the funder.
Revenue-based funding is our Tier 2 product: 6+ months in business, a 600+ FICO, $60,000 in verifiable revenue, a minimum daily balance of $800 and up to 2 current advances. Owners who outgrow it move to a line of credit or term loan once they clear Tier 1 at 3+ years and 650+.
We do not place microloans. If a microloan is clearly the better fit, we would rather tell you that than put a young business into a payment it should not carry yet.
If your deposits are under six months old or still irregular, waiting a few months often opens better options than forcing either product now. Track your average daily balance and negative days in the meantime, since those are what a revenue-based review reads first. You can check yourself against the published lines on funding requirements or run the qualification check.
Usually, yes. The trade is speed, amount and paperwork: microloans are smaller and slower and often require training or a business plan.
Not without revenue. The Tier 2 floor is 6+ months in business and $60,000 in verifiable revenue.
No. Our range starts at $25,000. For smaller, slower needs, a community or nonprofit microlender is often the better fit.
Sometimes, but any existing loan payment counts against your cash flow, and up to 2 current positions are allowed on the revenue-based tier. Disclose every obligation on the application.
Same-day decision. Applying takes a few minutes and will not affect your credit score.
