Cash Flow Finance

Revenue-Based Financing

Growth capital that flexes with your revenue

What is revenue-based financing?

Revenue-based financing (RBF) provides capital in exchange for a fixed percentage of your ongoing monthly revenue until a predetermined total amount is repaid. Unlike a merchant cash advance (which typically deducts from daily card sales or bank deposits), RBF pulls a percentage of total monthly revenue and is structured with longer repayment horizons — typically 12–36 months. It's popular with SaaS, eCommerce, and subscription businesses because repayments scale with your income — you pay more when revenue is strong and less during slower periods. The total cost is determined upfront as a flat fee (typically 6–12% of the advance amount), making it significantly cheaper than MCAs but more expensive than traditional bank loans or SBA financing. Because RBF providers underwrite your revenue trajectory rather than your assets or personal credit history, it's one of the more accessible growth capital options for businesses with strong revenue but limited collateral or operating history.

How it works

1

You apply and connect your bank accounts, payment processors, or accounting software (e.g. Stripe, QuickBooks, Shopify) so the RBF provider can verify your revenue history, growth trend, and consistency

2

The provider offers a capital amount based on your monthly recurring or total revenue — typically 3–6x your average monthly revenue — along with a flat repayment fee (e.g. 6–12% of the advance) that determines the total repayment amount

3

You receive the funds, usually within 3–10 business days

4

You repay a fixed percentage of monthly revenue (typically 2–8%) until you've repaid the total amount (advance + flat fee). If revenue grows, you repay faster. If revenue dips, monthly payments decrease automatically. Unlike a factor rate MCA, most RBF agreements do allow early repayment at a discount — check the specific terms, as this varies by provider.

Best for

SaaS and subscription businesses with predictable monthly recurring revenue (MRR) — RBF providers particularly value recurring revenue with low churn

eCommerce and DTC brands with consistent monthly revenue through Shopify, Amazon, or other platforms

Marketplace and platform businesses with transaction-based revenue

Companies growing quickly that don't want to dilute equity — RBF requires no equity, no board seats, and many providers do not require personal guarantees (confirm before signing)

Businesses that want flexible repayment tied to performance rather than fixed monthly loan payments

Companies with $15K+ monthly revenue that don't yet qualify for traditional bank loans or SBA financing due to limited operating history or lack of hard assets

Requirements

Primary requirementConsistent and verifiable monthly revenue — RBF providers underwrite your revenue trajectory, not your assets. You must be able to connect bank accounts, payment processors, or accounting software for automated revenue verification
Time in business6+ months (some providers require 12+ months of revenue history to establish a trend)
Annual revenue$200,000+ (most RBF providers require minimum monthly revenue of $15K–$25K. Some providers targeting SaaS specifically require $50K+ MRR)
Credit score600+ (RBF has lower credit requirements than bank loans but higher than MCAs. Revenue strength can offset a lower credit score with some providers)
Revenue qualityProviders evaluate revenue consistency, growth trend, customer concentration, and churn rate. Recurring revenue (subscriptions, contracts) is valued more highly than one-time or project-based revenue
Ownership50%+ ownership required by most providers
Key documentsArticles of incorporation, bank statements (6+ mo), government-issued ID
Existing debtMost RBF providers will check for existing MCAs, liens, or other senior debt. Heavy existing obligations can reduce the amount offered or disqualify you

Frequently asked questions

RBF and MCAs both provide capital repaid as a percentage of revenue, but they differ in cost, structure, and terms. RBF typically charges a flat fee of 6–12% of the advance amount, while MCAs use factor rates of 1.2–1.5x (equivalent to 20–50% of the advance). RBF pulls a percentage of total monthly revenue (typically 2–8%), while MCAs typically deduct 10–20% of daily card sales or make daily ACH debits. RBF repayment horizons are longer (12–36 months vs. 3–12 months for MCAs). Most RBF providers require higher credit scores (600+) and connect directly to your accounting or banking data for automated revenue verification. The most important practical difference: most RBF agreements allow early repayment at a reduced total cost, while MCAs lock in the full factor rate cost regardless of repayment speed.
RBF cost is expressed as a flat fee — typically 6–12% of the advance amount. On a $200K advance at the high end (12%), the total repayment is $224,000, meaning the cost of capital is $24,000. If a broker arranged the financing, an additional 0–2% fee may apply. The effective APR depends on how quickly you repay: if your revenue is strong and you repay $224,000 over 12 months, the effective APR is roughly 20–25%. RBF is significantly cheaper than MCAs (40–350% effective APR) but more expensive than traditional bank loans (7–15%) or SBA loans (6–13%).
No. RBF is non-dilutive — you retain full ownership and control of your business. There are no equity stakes, board seats, warrants, or conversion rights. This is one of the primary reasons venture-backed and founder-owned businesses prefer RBF over equity financing for growth capital. However, be aware that some hybrid "revenue-based" products from certain providers do include equity kickers or warrant coverage — always read the full agreement and confirm there are no equity components before signing.
Because repayment is a fixed percentage of monthly revenue, your payments decrease automatically when revenue falls. This is the core flexibility advantage of RBF over fixed-payment loans. However, if your revenue drops below a level where the percentage-based payments can reasonably repay the total amount within the expected term, the provider may renegotiate terms. Some RBF agreements include a minimum payment clause that kicks in if revenue drops below a specified threshold. Review the minimum payment terms before signing to understand your worst-case monthly obligation.
RBF providers evaluate your revenue holistically, not just the top-line number. Key metrics include: monthly recurring revenue (MRR) and its growth trend over the past 6–12 months, revenue consistency (providers prefer steady or growing revenue over volatile swings), customer concentration (if one customer represents more than 20–30% of revenue, this is a risk factor), churn rate (for subscription businesses — lower churn means more predictable future revenue), and gross margin (providers want to ensure the revenue-sharing percentage doesn't consume your entire margin). SaaS businesses with high MRR, low churn, and diversified customers receive the best terms.
A traditional term loan has fixed monthly payments regardless of how your business performs — if you have a slow month, you still owe the same amount. RBF payments flex with your revenue, providing a built-in safety valve during downturns. However, traditional loans are almost always cheaper: bank loan rates of 7–15% APR versus RBF effective rates of 20–30%. If you can qualify for a traditional loan or SBA loan, it will nearly always be the more cost-effective choice. RBF fills the gap for businesses that have strong revenue but don't meet traditional lending requirements due to limited operating history, lack of hard assets, or credit profiles below bank thresholds.

RBF Cost Calculator

See the real cost of revenue-based financing and what Laminar can save you.

Cost Breakdown

Factor cost$30,000
Origination fee$3,000
Broker fee$3,000
Wrong product risk (3.0%)$3,000
Document gathering$200
Application submissions$150
Lender back-and-forth$150
Total repayable amount$130,000
Total cost of borrowing$39,500
Laminar saves you
$8,300

21.0% of total cost. No broker fees, no app-by-app submissions, no back-and-forth, no wrong-product risk, and reduced origination fee (down to 1%) via Laminar.

Owner time valued at $50/hr. Actual costs vary.