When a share of revenue beats a fixed date
Revenue-based financing, generally, means you repay a percentage of revenue rather than a fixed amount on a fixed date. A slow month costs less; a strong one costs more. That is useful for project businesses, and Glendale has many of them. The city is a production center for the film industry, especially animation, together with Burbank, and people who work in that world often have uneven years. A heavy production season is followed by a gap between projects.
The same logic applies to a landscaper, a signage shop or an events caterer. Revenue comes in bursts, and a fixed payment sized for the average will hurt in the gap.
A three-step test
- Plot twelve months of deposits. Look at the highest month and the lowest. A wide gap is a signal this structure is worth considering.
- Find the lowest month's fixed costs. Rent, payroll and insurance still have to be paid when deposits are thin.
- Ask what a percentage of the highest month would be. If the share taken in a strong month still leaves comfortable margin, the structure holds.
For illustration only: a Glendale post-production shop earns $120,000 in its best month and $30,000 in its worst. A fixed $6,000 payment is 5% of the best month and 20% of the worst. A revenue share of 10% would be $12,000 and $3,000. Which is easier to live with depends on margins, and the numbers are an example, not our terms.
What it does not do
- It does not make costs smaller; it only moves when you repay.
- It does not suit steady businesses well, since a fixed schedule is easier to plan.
- It does not replace a reusable line if you need cash on demand.
If you need a defined project funded, a term structure may be clearer. If the need is a single machine, see equipment financing.
Questions to settle before choosing
Three practical questions help. First, how predictable is your pipeline? A business with signed work for six months can plan around a fixed payment; one that lives job to job may prefer a flexible one. Second, how much margin do you keep in your best months? If it is thin, a percentage share could squeeze you exactly when you want to reinvest. Third, how will you track it? Revenue-linked repayment is easier when your bank deposits are clean and consistent, with business sales going through one account.
Whatever you choose, keep a simple monthly sheet: deposits, payment, and what is left after fixed costs. It will tell you quickly whether the structure is working.
How to apply
We fund $25,000 to $5,000,000, with funding in as little as 24 hours once approved. We consider FICO 500+, need about three months of business bank statements, and do not require tax returns. The five-minute application uses a soft credit pull, and sole proprietors can apply. Apply to start. More options are on the working capital and Los Angeles County pages.