If your business generates predictable monthly revenue but you don't want to give up equity or take on rigid debt payments, revenue-based financing might be the option you've been looking for.
Revenue-based financing (or RBF) has grown fast over the past few years — especially for e-commerce brands, SaaS companies, and service businesses with strong monthly cash flow. Instead of fixed payments or handing over ownership, you pay back a percentage of your monthly revenue until you've repaid the agreed amount.
This guide breaks down exactly how revenue-based financing works, who it's built for, what it costs, and how to decide if it's the right fit for your business.
TL;DR: Revenue-based financing gives your business a lump sum of capital in exchange for a fixed percentage of future monthly revenue. Payments flex with your income — strong months mean faster payback, slow months mean lower payments. There's no equity dilution, no collateral, and no fixed monthly payment. RBF is best for businesses doing $15K+/month in revenue with predictable cash flow. Typical repayment caps range from 1.2x to 1.5x the original funding amount. Berkman Financial's funder network includes RBF options alongside MCAs, lines of credit, and other products — so you see the best fit, not just one option.
What is revenue-based financing?
Revenue-based financing is a funding model where a business receives a lump sum of capital and repays it by sharing a fixed percentage of its monthly (or daily) revenue with the funder until a predetermined total has been repaid.
Here is an example. Say your business receives $200,000 in revenue-based financing with a repayment cap of 1.3x. That means you owe $260,000 total. If the repayment percentage is set at 8% of monthly revenue and you generate $100,000 in revenue this month, your payment that month is $8,000. Next month, if revenue dips to $60,000, your payment drops to $4,800.
The total amount owed does not change — but the speed at which you repay it flexes with your business performance.
Revenue-based financing is not a loan in the traditional sense. There is no interest rate that compounds over time. There is no fixed maturity date. And there is no equity component — you do not give up any ownership of your business.
How does revenue-based financing actually work?
The mechanics of RBF are straightforward:
1. You apply and share your revenue data. Most RBF funders want to see three to six months of bank statements or connect to your accounting and payment platforms. They are underwriting your revenue trajectory, not your credit score.
2. The funder makes an offer. The offer includes three numbers: the advance amount (how much you receive), the repayment cap (the total you will repay, expressed as a multiple of the advance), and the revenue share percentage (the portion of monthly or daily revenue that goes toward repayment).
3. You receive funds. Once you accept and sign, funds are typically wired within one to three business days. Some funders in our network can fund same-day.
4. Repayment happens automatically. The agreed percentage is deducted from your revenue — usually via ACH from your business bank account on a daily or weekly basis. You do not write checks or make manual transfers.
5. When the cap is reached, you're done. Once your payments total the repayment cap amount, the obligation is complete. There is no ongoing relationship unless you choose to take another round.
Revenue-based financing vs. traditional loans
Understanding the structural differences helps you pick the right product for your situation.
| Factor | Revenue-Based Financing | Bank Term Loan | SBA Loan |
|---|---|---|---|
| Repayment structure | % of revenue (flexible) | Fixed monthly payment | Fixed monthly payment |
| Collateral required | No | Usually yes | Usually yes |
| Equity required | No | No | No |
| Credit score emphasis | Low — revenue matters more | High — 680+ typical | High — 680+ typical |
| Time to fund | 1–3 days | 2–8 weeks | 30–90 days |
| Cost structure | Repayment cap (1.2x–1.5x) | Interest rate (APR) | Interest rate (APR) |
| Documentation | Bank statements, revenue data | Tax returns, financials, business plan | Extensive |
| Early payoff | Often saves on cost | May have prepayment penalties | Varies |
Revenue-based financing costs more than a bank or SBA loan in most cases. The tradeoff is speed, flexibility, and accessibility. If your business qualifies for a bank loan and you can wait for underwriting, the bank loan will almost always be cheaper. If you cannot wait, do not qualify, or need payments that flex with your revenue, RBF fills the gap.
Revenue-based financing vs. equity investment
This is the comparison that matters most for growth-stage businesses.
Taking on a venture capital or angel investment means giving up a percentage of ownership — permanently. If your company grows to be worth $10 million, that 10% you gave up for $200,000 is now worth $1 million. The cost of equity is invisible at first, but it compounds over time.
Revenue-based financing has a fixed, known cost. A $200,000 advance with a 1.3x cap costs $260,000 total, regardless of how large your company becomes. Once you repay the cap, the obligation is over. You retain 100% ownership.
The downside: RBF requires near-term repayment from revenue, which means it works best when the capital generates a fast return — inventory, marketing, hiring, or fulfilling a large order. Equity is more patient capital suited for longer R&D cycles or pre-revenue companies.
For businesses that are already generating revenue and want to accelerate without dilution, RBF is the more efficient choice.
Who qualifies for revenue-based financing?
Revenue-based financing eligibility is driven by business performance, not personal credit history. Most funders in our network look for:
- $15,000+ in monthly revenue — Some funders set the bar at $10,000, others at $25,000. Higher revenue generally unlocks better terms.
- 6+ months in business — Funders want to see a revenue track record, not projections.
- Consistent or growing revenue — Month-over-month stability matters more than absolute size. Wild swings in revenue make funders nervous.
- Active U.S. business bank account — This is where repayment is collected via ACH.
- No open bankruptcies — Most funders will not approve during an active bankruptcy proceeding.
Credit scores below 600 are routinely approved for RBF. Some funders do not check personal credit at all. The product is underwritten on business performance, which makes it accessible to business owners who have been turned down by banks.
Industries that commonly use revenue-based financing include e-commerce, SaaS and subscription businesses, B2B services, healthcare practices, restaurants, and professional services. See the full list of industries we fund.
What does revenue-based financing cost?
RBF is priced using a repayment cap multiplier, not a traditional interest rate. Understanding the math is straightforward:
Advance amount x repayment cap = total repayment
Example: $100,000 advance at 1.25x cap = $125,000 total repayment. The $25,000 is the cost of capital.
Typical repayment caps range from 1.2x to 1.5x depending on your revenue strength, time in business, industry, and repayment history. Higher risk profiles pay higher caps.
The effective cost on an annualized basis depends on how quickly you repay. If you repay a 1.25x cap in six months, the annualized cost is significantly higher than if you repay over twelve months. This is similar to how factor rates work for merchant cash advances — the total cost is fixed, but the speed of repayment affects the effective annual rate.
Every offer from Berkman Financial's funder network shows the advance amount, repayment cap, revenue share percentage, and estimated repayment timeline. No hidden fees, no surprises.
For a broader comparison of all capital products — including RBF, MCAs, lines of credit, and invoice financing — visit our products page.
When RBF makes sense (and when it doesn't)
Revenue-based financing makes sense when:
- You need capital to fund growth that will generate near-term revenue — inventory, marketing, hiring, fulfilling a large contract
- You want flexible payments that adjust with your cash flow instead of fixed monthly obligations
- You cannot qualify for a traditional bank loan due to credit, time in business, or documentation
- You want to retain 100% equity in your business
- You need capital faster than a bank can underwrite (days, not weeks)
Revenue-based financing probably is NOT the right fit when:
- Your business is pre-revenue or has highly unpredictable cash flow
- You qualify for a bank loan or SBA loan and can afford to wait for funding
- You need capital for a long-term investment that will not generate returns for 12+ months
- Your margins are too thin to absorb the daily or weekly revenue share without creating a cash flow problem
A business loan broker helps you make this determination. When you apply through Berkman, your advisor evaluates your business and recommends the product category — RBF, MCA, line of credit, or something else — based on your actual numbers, not a one-size-fits-all recommendation.
How to apply for revenue-based financing
Applying through Berkman Financial takes about five minutes. Here is what to expect:
What you need:
- Business name, EIN, and contact information
- Three months of business bank statements
- Monthly revenue estimate
What you do NOT need:
- Tax returns or financial statements
- Business plan or projections
- Collateral documentation
- In-person meetings
What happens next:
- You submit a single application — soft credit pull only, no impact to your score
- A named Berkman advisor reviews your file and asks any clarifying questions
- Your file is shopped across our funder network, including multiple RBF providers
- You receive competing offers side by side — advance amount, repayment cap, revenue share percentage, and total cost
- You choose the best fit, sign electronically, and fund — often within 24 to 48 hours
We have funded over $525 million for more than 10,000 businesses since 2015. Revenue-based financing is one of five capital products we match businesses to through our funder network.
See what your business qualifies for
Common questions about revenue-based financing
What is revenue-based financing in simple terms?
Revenue-based financing is a lump sum of capital you receive today and repay by sharing a percentage of your future monthly revenue. Payments are flexible — they go up when revenue goes up and down when revenue slows. There is no equity given up, no collateral required, and no fixed maturity date. You repay until the agreed total (usually 1.2x to 1.5x the advance) is reached.
How is revenue-based financing different from a merchant cash advance?
The core difference is in the repayment mechanism. A merchant cash advance is repaid as a percentage of daily credit card sales — meaning it is tied specifically to card volume. Revenue-based financing is repaid as a percentage of total revenue collected through your bank account. This makes RBF a better fit for businesses that do not rely heavily on card transactions, such as B2B companies, SaaS businesses, and service providers.
What credit score do I need for revenue-based financing?
Most RBF funders underwrite based on your business revenue, not your personal credit score. Scores as low as 500 are routinely approved. Some funders do not check personal credit at all. The primary qualification factors are monthly revenue, time in business, and revenue consistency.
How fast can I get revenue-based financing?
Through Berkman Financial's funder network, most RBF applications receive offers within two hours. Once you accept and sign, funding typically arrives within one to three business days. Same-day funding is available through select funders for qualified applicants.
What percentage of revenue do I have to pay?
The revenue share percentage is set during the offer process and typically ranges from 5% to 15% of monthly revenue. The exact percentage depends on your funding amount, repayment cap, and the funder's terms. Your Berkman advisor shows you exactly how each offer's revenue share will affect your daily cash flow before you sign.
Can I use revenue-based financing to grow my business without giving up equity?
Yes — that is the primary advantage of RBF over equity investment. You receive growth capital, repay a fixed total amount from revenue, and retain 100% ownership of your business. Once the repayment cap is met, the obligation is complete. No board seats, no dilution, no ongoing equity relationship.
