Revenue-based financing (RBF), sometimes called revenue-based funding, is typically structured so repayments are tied to business revenue performance. Instead of a traditional fixed monthly payment, you may repay through a percentage of revenue (or a similar cash-flow-linked mechanism) until the agreed payback amount is satisfied. Terms and structures vary by provider.
Revenue-based financing is a funding model where repayment is linked to business revenue. This approach is often used by businesses that want capital for marketing, inventory, hiring, or expansion—while aiming to reduce pressure during slower months. Unlike equity financing, RBF is generally not about selling ownership; it’s a financing arrangement with a defined repayment structure and total cost.
RBF is not identical to a merchant cash advance. Product terms, pricing, and repayment mechanics can differ. Always compare total payback and cash flow impact.
RBF works best when tied to initiatives with measurable returns, ensuring sustainable repayment.
Approval depends more on deposit consistency and cash flow trends than traditional collateral.
Payments rise and fall with revenue, continuing until the agreed payback amount is reached.