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What is revenue funding?

What is the definition of revenue-based funding?

Despite popular belief, revenue-based funding is not a loan. Unlike loans, which are the lending of a lump sum of money to be paid back over time with interest, revenue-based funding is the purchase of future income against current cash flows. While this may sound similar to a loan, there are a few major differences:

One of the biggest advantages of revenue funding is that you do not pay compounding interest. The interest rate on revenue-based financing is just a flat fee. With traditional loans, seemingly low interest rates can add up to much higher rates over time due to compounding. To clarify this, consider the following example:

Jeannette needs extra money for her small business. She qualifies for both revenue funding and a bank loan. The revenue funding has a simple rate of 40% and the bank loan has an APR of 12%, compounded monthly. Which one should she get?

As we see here, despite having a higher apparent fee rate, revenue funding is very competitive over longer time frames.

Finally, a good partner will price the daily payment amount low enough that it shouldn't impact business. Some services are predatory and don't care about the well-being of their clients, but we feel that is a counterproductive way to do business. We make sure that our clients secure the most affordable options available and get competitive refinancing terms for their businesses. We guide you through the entire process of getting and provide you with regular updates about your status. After all, we only prosper when you prosper.

The simple explanation:

For example:

Last Updated Date: 2018-06-01