The basic idea
With revenue-based financing, repayment is linked to the revenue your business brings in rather than to a fixed payment on a fixed calendar. When sales are strong, you repay faster. When they slow, the payment moves with them. That linkage is the whole appeal for businesses whose sales are uneven.
The details differ from one agreement to the next, so we do not describe a standard version here. Always read the written agreement for how repayment is calculated, how it is collected and what the total cost is.
Why California operators look at it
Fixed monthly payments are comfortable when income is steady. They are hard when it is not, and a lot of California is not steady.
- Central Valley growers and packers earn in bursts around harvest and spend heavily before it.
- Coastal restaurants, hotels and tour businesses have loud summers and quiet winters in many areas.
- Inland Empire distributors ride volume swings tied to their customers' own seasons.
- Bay Area and Los Angeles studios, agencies and clinics can see income lumpy from project billing.
For these businesses, a payment that rises and falls with sales can be easier to carry than one that stays flat through a slow month.
A simple illustration
For illustration only, with round numbers that are not our terms or a typical outcome: imagine a coastal shop that sells much more in summer. A flat monthly payment is the same in July and in January. A payment tied to revenue would be larger in July and smaller in January. The owner trades predictability of the payment for a payment that tracks the business. Whether that trade is worth it depends on the total cost, which is why you compare it to a flat-payment option.
Questions to ask before you accept any offer
- How exactly is repayment calculated from my revenue?
- How is it collected: from deposits, a fixed share, or something else?
- What is the total amount I will repay, in dollars?
- What happens in an unusually slow month, and in an unusually strong one?
- Can I repay early, and does that change the total?
If an offer cannot answer these in writing, keep looking.
Compared with the alternatives
| Option | Payment pattern | Typically suits |
|---|---|---|
| Revenue-linked repayment | Moves with sales | Seasonal or uneven income |
| Fixed-payment financing | Same each period | Steady monthly revenue |
| Flexible credit you draw on | Depends on use | Short timing gaps |
No option is better in the abstract. Match it to how your revenue actually behaves across the year.
Applying with us
We fund $25,000 to $5,000,000. We look at about three months of business bank statements, with no tax returns required, and we consider FICO 500 and above. The application takes about five minutes and uses a soft credit pull. Funding can arrive in 4 hours once approved, and sole proprietors can apply. The structure that fits you is determined from your statements. Start your application.