How Revenue-Based Financing Works for Small Businesses

Revenue-based financing (RBF) is business funding sized to how much money your business brings in, rather than mainly to your credit score or collateral. Providers look at your deposits and sales, offer an amount based on them, and collect repayment as your revenue comes in.

How revenue-based financing works

• You connect your business bank account so the provider can see your actual deposits
• The provider offers an amount based on your monthly revenue
• You agree to repay a set total, collected as a share of revenue or as fixed daily, weekly or monthly payments, depending on the product
• Repayment continues until the agreed total is paid

What it costs

RBF is usually priced as a fixed total repayment, often expressed as a multiple of the amount you receive, rather than an interest rate. That makes the total cost easy to see, but it isn't an APR. If repayment happens over a short period, the equivalent annual cost can be high, so compare offers on total repayment and expected term.

What providers look at

• Monthly revenue and how consistent it is
• Time in business, shown through bank statements
• Existing debts and advances
• Credit, which is reviewed but weighted less than revenue

Revenue-based financing vs. a loan vs. an MCA

• Bank or SBA loan: lower cost and longer terms, but stricter credit, history and paperwork requirements
• Revenue-based financing: approval centers on revenue, with repayment tied to how your business performs
• Merchant cash advance: a type of revenue-based funding that buys a share of future card or bank sales, typically with daily or weekly collections

When revenue-based financing makes sense

• Your revenue is steady but your credit or time in business doesn't fit a bank loan
• You need funds for something that should grow revenue, like inventory, marketing or a new contract
• You prefer payments that follow your sales instead of a fixed monthly bill

When to look elsewhere

If you qualify for an SBA 7(a) loan or a bank line of credit, those usually cost less over time. And if your revenue is uneven or falling, any revenue-based product can strain cash flow, so borrow only what your sales can comfortably support.

GoSwiftFund's revenue-based capital partners consider credit profiles from 500 and up and focus on your business deposits. Checking your options is a soft inquiry with no impact on your credit score.