The idea in one paragraph
With revenue-based financing, repayment moves with the money you bring in. In strong months more goes toward the balance, in weak months less. That is the opposite of a fixed monthly payment, which stays the same no matter how the month went. For owners in businesses with a noticeable rhythm, that difference can decide whether a slow month is an inconvenience or an emergency.
Elk Grove businesses with a rhythm
Elk Grove's history is agricultural. Wikipedia describes a crossroads on the Monterey Trail during the Gold Rush, with stage stops serving travelers, and ranches growing wheat, barley, fruit and nuts nearby. Farming still shapes the calendar for suppliers and equipment dealers. Modern businesses add other rhythms: tasting rooms around the area's vineyards that are busy on weekends, school-year businesses tied to the Elk Grove Unified School District calendar, and trades that slow in wet weather.
Every one of those has a high and a low. Revenue-based repayment lets the payment breathe with them.
A month-by-month illustration
| Month | Sales (example) | Fixed $3,000 payment | 10% of sales |
|---|---|---|---|
| Strong | $50,000 | $3,000 | $5,000 |
| Average | $30,000 | $3,000 | $3,000 |
| Weak | $12,000 | $3,000 | $1,200 |
For illustration only. The percentage here is made up, and we are not describing any offer or rate. The point is the shape: the revenue-linked payment shrinks in the weak month, while the fixed payment does not.
The tradeoff to check
Flexible payments are not free. If repayment tracks sales, a strong year can mean repaying faster, and the total cost can be higher than a fixed schedule would have been. Ask for the total amount repayable under different sales scenarios, and ask whether there is a minimum payment in slow months.
Compare against a fixed term loan if your sales are steady, or a line of credit if your need is irregular but your revenue is not.
A question to ask your bookkeeper first
Before choosing a revenue-linked product, pull twelve months of deposits and sort them from highest to lowest. If the best month is more than double the worst, flexible repayment deserves a serious look. If the months sit within a narrow band, a fixed schedule is easier to plan and may cost less overall. Owners in Elk Grove often find that two or three months drive most of the year, which is useful to know before you take any obligation. Match the product to the pattern in your own statements rather than to a general rule.
What we need
We provide funding from $25,000 to $5,000,000, as fast as 24 hours once through. We consider FICO 500+, ask for about three months of business bank statements, and need no tax returns. The application takes five minutes and uses a soft credit pull. Sole proprietors can apply. Neighbors in the wider Sacramento region use the same process. Apply here or see the main Elk Grove page.