For business owners looking for a financing solution that adjusts to their cash flow, revenue-based financing (RBF) might be the answer. Instead of fixed monthly payments, RBF allows you to repay a percentage of your monthly revenue—meaning you pay less during slower months and more when business is booming.
How It Works
RBF isn’t a loan in the traditional sense. There’s no set repayment term. Instead, your business receives an upfront lump sum, and you repay it through a percentage of your monthly revenue until the total agreed amount is paid back (usually the original amount plus a fixed fee).
Who It’s For
This model is especially useful for businesses with seasonal or inconsistent revenue, like e-commerce shops, service-based companies, or those in hospitality.
Key Advantages
- Flexible Payments: Pay based on your actual revenue.
- No Equity Lost: Unlike venture capital, you retain full ownership.
- Fast Access: Approvals and funding can happen quickly.
Things to Consider
- It’s not ideal for businesses with very low or unpredictable revenue.
- The total repayment amount can be higher than traditional loans.
At Enrado Capital, we work with several providers who specialize in RBF. If flexibility is what your business needs, let’s talk.
