Revenue-Based Financing

No matter the scale of your company, we specialize in finding funding programs tailored to your needs!

Intro To Revenue-Based Financing

Traditional small business loans frequently impose inflexible repayment terms, mandating fixed monthly payments that might not synchronize with variable business cycles. This can prove problematic for enterprises encountering seasonal revenue fluctuations. If your business operates in an industry prone to periodic revenue peaks and troughs, Revenue-Based Financing presents an adaptable solution for your financial requirements.

Revenue-Based Financing provides a flexible alternative whereby repayment is linked directly to your business’s revenue. Unlike conventional loans that demand consistent monthly payments irrespective of sales fluctuations, this financing avenue permits repayments that vary in tandem with your revenue stream. Consequently, it caters effectively to businesses experiencing irregular revenue patterns.

Revenue-Based Financing offers notable flexibility and ease of qualification, primarily assessed based on your sales volume. While resembling merchant cash advances, it isn’t restricted to businesses with substantial debit and credit card sales. This financing avenue grants access to larger borrowing sums and extended repayment durations, tailored to diverse business requirements.

Throughout this comprehensive guide, we will thoroughly explore Revenue-Based Financing, covering its intricacies and benefits in detail.

What Is Revenue-Based Financing?

Revenue-Based Financing, alternatively termed as a “business cash advance” or “revenue-based business loan,” functions by providing a lump sum tied to your monthly revenue. Unlike conventional loans with set monthly installments, this financing option offers flexibility in repayment. Depending on the lender, payments can be structured on a daily, weekly, or monthly basis.

In essence, revenue-based financing mirrors a merchant cash advance in that repayments fluctuate in line with your sales volume. However, unlike merchant cash advances which draw payments from debit and credit card sales, revenue-based loans are repaid from your entire sales revenue.


$5K – $5M


Starting at 1-6% p/mo


3 – 24 months


1-2 Business days

How Does Revenue-Based Financing Work?

Revenue-Based Financing, also referred to as a “business cash advance” or “revenue-based business loan,” provides borrowing amounts based on total monthly receipts, often surpassing those available through a merchant cash advance reliant solely on debit and credit card sales.

The repayment structure in revenue-based financing varies based on your cash flow patterns. Lenders typically offer flexible payment frequencies such as daily, weekly, or monthly. They deduct a percentage of your revenue, termed as a “capture rate,” typically below 10%, according to your chosen repayment schedule. This means higher payments during periods of robust revenue and lower payments during slower periods.

Despite payment fluctuations tied to sales, the entire borrowed amount must be repaid within a specified timeframe.

Recent reports highlight the growing popularity of revenue-based loans:

According to the 2023 Small Business Credit Survey, 22% of small businesses obtained financing from online lenders, marking an increase from 17% in 2020.

The global alternative financing market was valued at $6.57 billion in 2021 and is anticipated to reach $10.61 billion by 2030, with an average annual growth rate of 6.17%. Source: Straits Research Alternative Financing Market Report.

A study by Pymnts found that 62% of Main Street Small and Medium-Sized Businesses (SMBs) with $150,000 in annual revenue lacked access to funding to cover potential cash flow gaps. Similarly, 50% of SMBs with annual revenue between $150k and $1 million faced similar challenges in accessing sufficient funding.

What Are The Advantages of Revenue-Based Business Loans?

Revenue-based financing enables businesses to effectively leverage their recurring revenue. If your business has seen substantial revenue growth over the past three months, you’re likely eligible for a significant amount of capital. Unlike traditional loans, factors like credit score or annual revenue have minimal impact on the loan size. This makes revenue-based financing a viable option for accessing larger sums even with poor credit or without collateral, which can be challenging with other financing products.

A key advantage of revenue-based financing lies in its flexible repayment terms. Instead of fixed payments that can strain cash flow during slow periods, you only pay a fixed percentage of your sales. This flexibility is especially beneficial for seasonal businesses, allowing for lower payments during off-peak seasons and higher payments during peak times of increased sales. This structure helps minimize the overall cost of the loan, as payments are aligned with revenue fluctuations.

Unlike merchant cash advances, which are tied to debit and credit card sales, revenue-based business loans accommodate businesses regardless of their customers’ preferred payment methods. As long as your business generates consistent monthly revenue, you can qualify.

Additionally, revenue-based financing typically offers longer repayment terms compared to merchant cash advances. While merchant cash advances often require daily payments, revenue-based loans can be structured with monthly, weekly, or daily repayment schedules, providing further flexibility for businesses to manage their cash flow effectively.

What Are The Disadvantages of Revenue-Based Business Loans?

Businesses facing hurdles in qualifying for traditional financing options or requiring rapid access to capital often opt for revenue-based financing agreements. These entrepreneurs may encounter challenges such as poor credit histories, which typically diminish their prospects of obtaining term loans or lines of credit. Lenders view poor credit as a heightened risk factor, raising apprehensions about timely repayment.

Products like revenue-based financing and merchant cash advances impose higher rates and fees to offset these risks. Revenue-based small business loans often incur greater costs compared to merchant cash advances due to their higher borrowing limits and extended repayment terms. Over the course of the loan, businesses are likely to accrue significant interest expenses.


Revenue-Based Financing Compared To Other Products


Who Qualifies For Revenue-Based Financing?

Approved businesses generally met the following criteria:






4 months+

How To Apply For Revenue-Based Financing:

Securing a revenue-based business loan is a straightforward process aimed at facilitating swift access to capital. Here’s how you can begin:

Step 1: Assess Your Needs

Before initiating your application, it’s essential to verify that a revenue-based loan aligns with your particular business requirements. Evaluate whether the financing will effectively support your intended goals and if the repayment terms are compatible with your cash flow. Clearly define the precise amount of funding needed to avoid unnecessary borrowing.

Step 2: Gather Required Documents

Prepare the following documents for the application process:

Step 3: Complete the Application

To start the application process, you can either reach out to us via phone or complete a brief online form. Please provide the requested details, including the amount of funding you are seeking.

Step 4: Consult with a Representative

Once your application is submitted, a representative will reach out to you to review repayment terms, applicable interest rates, and the terms you qualify for. This ensures transparency and clarity, eliminating any surprises or hidden fees during the repayment period.

Step 5: Approval and Funding

Upon approval, funds will generally be deposited into your bank account within 1-2 business days.

Managing Your Revenue-Based Loan

Your revenue-based loan not only provides essential financial support but also presents an opportunity to strengthen your credit profile. Here’s how you can make the most of it:

  • Ensure all scheduled payments are made promptly and in full.
  • If utilizing a line of credit or other revolving credit, keep your balance below the credit limit.

By consistently meeting these financial obligations, you can positively impact your credit score, improving your eligibility for better interest rates and terms in future financing endeavors.

What If I’m Declined For Revenue-Based Financing?

If an application for revenue-based financing is not approved, it may be due to timing issues related to your cash flow. This financing option heavily considers your monthly revenue rather than annual revenue or gross margins. Therefore, strong sales over the past three months can significantly improve your approval chances. Providing statements that demonstrate consistent repayment performance in previous months from the past year could also be beneficial.

While revenue-based financing is accessible for borrowers with poor credit histories, the reason behind the credit issues is critical. Some factors leading to poor credit may be beyond your control, while others could indicate a significant debt burden that might impact your ability to manage additional loans responsibly.

At 60Day Capital, we specialize in guiding you through alternative financing options tailored to your specific situation. If revenue-based financing isn’t the best fit, we may recommend more suitable and cost-effective tools, such as business credit cards or personal loans. These alternatives are typically easier to qualify for and can provide the capital you need without the stringent requirements of traditional business loans.

Contact us

175 Great Neck Rd # 206, Great Neck, NY 11021, United States