Repayment that follows sales
Under revenue-based financing, what you repay in a period follows the revenue you actually collect rather than a flat, preset amount. A strong stretch pays the balance down faster and a slow one asks for less. It is a way of sharing the timing risk. It is not free money and it is not always cheaper; the total cost depends on the offer, which we do not publish on this page.
Which Lancaster businesses have the shape for it
Lancaster's economic base, according to Wikipedia, has leaned on business and industrial parks, large employers that the former redevelopment agency helped attract, such as SYGMA and Bank of America among others, and BYD's electric bus and battery storage operations. It also has a policy requiring solar panels on all new homes, taking effect in January 2014, and the article says Lancaster has the highest solar production per capita in California.
You can draw practical lines from that without inventing figures. Trades that serve new construction, installation or equipment, and suppliers to manufacturers, are paid by project. A project that slips a month moves a whole month of revenue. A flat monthly repayment lands the same way whether or not the project paid. Revenue-linked repayment is built to bend in exactly that situation.
Walk through a lumpy quarter
For illustration only: a Lancaster subcontractor collects $20,000 in January, $65,000 in February and $12,000 in March. A fixed installment sized for the average of about $32,000 feels easy in February and heavy in March. With repayment tied to revenue, the March bill shrinks with the month's deposits. The trade-off is that February's repayment grows. If the high month is big enough, the balance clears quickly, but you also hand over more in the month you might have wanted to keep. These are example numbers, not our terms.
Where it is a poor fit
- Businesses with thin margins, because repayment taken from every sales dollar can leave too little to run on.
- Businesses with very steady revenue, where a term loan may be simpler.
- Owners who need a revolving cushion, where a line of credit is a cleaner tool.
Before you apply
Pull three months of deposits and mark the biggest and smallest weeks. We ask for about three months of business bank statements and a 5-minute application. We consider FICO 500 and above, do not require tax returns and use a soft credit pull. Requests run from $25,000 to $5,000,000, with funding possible in as little as 24 hours after approval. Sole proprietors can apply. See also merchant cash advance for a close cousin with a different structure, and apply here.