Matching repayment to a coastal calendar
Revenue-based financing, in general, ties repayment to a percentage of revenue. For a Huntington Beach business, the useful feature is that it leans with the seasons: a slow winter week costs less, a strong summer weekend costs more.
Surf City draws visitors to the beach, the pier area and shopping centers such as Bella Terra and Old World Village. Businesses that serve those visitors, such as rental operators, restaurants, surf and apparel shops, and tour or lesson companies, are exposed to the calendar in a way an office-based business is not.
Who in the city might compare it
- Seasonal retailers that earn a large share of annual revenue in a few months.
- Restaurants with strong weekends and weak weekdays.
- Lesson, rental and tour businesses that depend on weather.
- Contractors and service firms serving the industrial side of the city, whose work comes in project waves.
Not everyone benefits. A business with steady, predictable monthly revenue may find a fixed schedule simpler to plan, and revenue-linked repayment can cost more in a strong year, since it takes more when you sell more.
Run the comparison on your own numbers
- List your twelve monthly revenue totals.
- Calculate a payment as a percentage of each month, and compare it with a fixed amount that adds up to the same total.
- Look at the three weakest months in both versions. If the fixed version threatens payroll in those months, the linked version is worth a closer look.
- Look at the three strongest months. Make sure the linked version still leaves enough margin to reinvest.
For illustration only: a beach rental business totals $480,000 across a year, with $90,000 in July and $18,000 in January. A fixed payment of $3,000 a month is easy in July and heavy in January. A 6% share would be $5,400 in July and $1,080 in January. The numbers are an example, not our terms.
Practical pointers for a coastal business
Keep all business sales flowing through one account, since repayment tied to revenue is easier to track that way. Check how a washout week affects the plan: a storm that closes the pier area for a few days lowers revenue, and a linked payment drops with it. Compare the total cost and not only the monthly figure, because a flexible payment can add up to more or less than a fixed one depending on how the year goes.
Finally, think about what you will do in a very strong year. If a big summer takes more of your revenue than you expected, you will want enough margin to keep investing.
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 pull, and sole proprietors can apply. Apply to get started.
Also compare a line of credit, merchant cash advance or term loans. For more context, see Orange County.