Revenue-Based Financing.
Get fast access to working capital based on your future revenue. Receive a lump sum upfront and repay through a fixed percentage of your daily or weekly sales — no collateral, no equity dilution.
Overview
What is revenue-based financing?
Revenue-based financing is a form of business funding where a company receives a lump sum of capital upfront in exchange for a fixed percentage of its future revenue. Instead of making a single monthly loan payment, repayment happens automatically through daily, weekly, or semi-monthly draws directly from your business account until the total repayment amount is satisfied.
You may also hear this type of funding referred to by other names, including merchant cash advance (MCA), business cash advance (BCA), working capital advance, or purchase of future receivables. The exact label varies by provider and agreement structure, but the core concept is the same: you get capital today based on revenue you expect to earn tomorrow.
Because approval is driven primarily by your recent sales volume and cash flow — not personal credit score or years of history — revenue-based financing is one of the most accessible options for businesses that can't qualify for traditional bank loans or need capital faster than banks can deliver.
Fastest Funding Available
Approval and funding can happen within 24 hours — faster than virtually any other financing type on the market.
No Collateral Required
Revenue-based financing is unsecured — you don't need to put up business or personal assets to qualify for funding.
Accessible Qualification
Approval is based on your business's cash flow performance, not just your credit score — making it available to more businesses.
Eligibility
Do I qualify?
Minimum Qualifications
- 500+ personal FICO score
- At least 3 months in business
- $4,000+ in monthly revenue
What You Need to Apply
- Basic info about your business
- Business checking account
- Last 3 months business bank statements
Applying is free and won't impact your credit score.
How It Works
How does revenue-based financing work?
A financing company advances you a lump sum of capital in exchange for a percentage of your ongoing revenue until the total repayment amount is met.
Apply & Get Approved
Submit a brief application with basic business details and 3 months of bank statements. Approval is based primarily on your recent sales volume and cash flow trajectory.
Receive Your Capital
Once approved, you receive a lump sum advance deposited directly into your business account — often within 24 hours. Funding amounts typically range from $5K to $2 million.
Repay Through Revenue
A fixed percentage of your daily or weekly revenue is automatically drawn from your account until the advance plus the factor rate is fully repaid. Terms typically range from 3 to 36 months.
Key Terms
Understanding the costs
Revenue-based financing uses a different fee structure than traditional loans. Here are the key terms to understand before you sign.
Factor Rate
Instead of an interest rate, revenue-based financing uses a factor rate — a multiplier (typically 1.1x to 1.5x) applied to the advance amount. A $50K advance at 1.3x means you repay $65K total, regardless of how long it takes.
Retrieval Rate
This is the percentage of your daily or weekly revenue that gets automatically deducted to repay the advance. Retrieval rates commonly range from 5% to 20%, negotiated to ensure your business retains enough cash for daily operations.
Repayment Term
Because payments scale with your sales volume, the actual repayment timeline can shift. Strong sales months mean faster payoff; slower months extend the timeline. Most advances are structured for 3 to 36 months.
Calculator
Revenue-Based Financing Calculator
Estimate your total repayment and daily or weekly payment based on your advance amount, term, and payback frequency.
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Considerations
Is revenue-based financing right for your business?
Revenue-based financing fills an important gap in the market, but it's not the right fit for every situation. Here's how to think about it.
When It's a Good Fit
Revenue-based financing works best when you need capital quickly and can't qualify for traditional loans — either because of limited credit history, a lower credit score, or because you simply don't have time to wait. It's well-suited for businesses with consistent daily or weekly sales, like restaurants, retail stores, service businesses, and e-commerce companies. It's also commonly used for short-term needs: covering emergency expenses, bridging a gap while waiting on a large invoice, stocking up on inventory before a busy season, or funding a marketing push.
When to Explore Alternatives
If your business qualifies for a term loan, SBA loan, or line of credit, those options will almost always be less expensive. Revenue-based financing carries a higher total cost because of the speed, accessibility, and risk the funder is taking on. If you have strong credit, at least two years of operating history, and can wait 2–4 weeks for funding, you'll likely find better terms elsewhere. It's worth applying for those first — our application process will match you with the best options available to you regardless of product type.
What to Watch For
Always understand the total cost before accepting an offer. Factor rates can be misleading if you only look at the multiplier — a 1.3x factor rate on a 6-month advance is a very different effective cost than 1.3x over 24 months. Ask about the retrieval rate and make sure the daily or weekly draws won't strain your cash flow. Be cautious of stacking multiple advances, and read the full agreement carefully — especially any personal guarantee clauses, default provisions, or prepayment terms.
Trade-offs
Pros & cons
Pros
- Fastest funding option — approval and deposit often within 24 hours
- Minimal qualification requirements (500+ credit score, 3+ months in business)
- No collateral or business assets required
- Payments scale with your revenue — slower months mean smaller draws
- Simple application with minimal documentation
Cons
- Higher total cost than traditional loans — effective APRs can be significant
- Daily or weekly automatic draws can strain cash flow during slow periods
- Factor rates can be difficult to compare against traditional interest rates
- Not ideal for long-term capital needs or large-scale investments
Our Process
Our application process is easy
Apply Instantly
Fill out our quick and easy online application. It only takes a few minutes and won't affect your credit score.
Discover Your Options
Receive personalized funding offers, carefully curated to align with your business goals and requirements.
Get Funded
Choose the best funding offer for you and access the capital your business needs in as little as 24 hours.
FAQs
Revenue-Based Financing FAQs
Common questions about this fast, flexible funding option.
Still have questions? Contact us →Is revenue-based financing the same as a merchant cash advance?
They're closely related but not identical. A traditional merchant cash advance (MCA) specifically draws repayment from credit and debit card sales, while revenue-based financing can draw from your total bank account revenue via ACH. In practice, the terms are often used interchangeably by lenders. The structure is similar: you receive a lump sum upfront and repay through a percentage of ongoing revenue until the total amount (advance × factor rate) is satisfied.
What is a factor rate and how does it work?
A factor rate is a decimal multiplier that determines your total repayment amount. It typically ranges from 1.1 to 1.5. If you receive a $50,000 advance with a factor rate of 1.25, your total repayment would be $62,500 — regardless of how long repayment takes. Unlike traditional interest, the cost is fixed upfront. This makes it simple to understand your total obligation, but it also means you don't save money by paying back faster unless the agreement specifically offers early repayment discounts.
How fast can I get funded?
Revenue-based financing is one of the fastest funding options available. Many businesses receive approval within hours and see funds deposited within 24 hours. The streamlined process — requiring only basic business information and recent bank statements — is what makes the turnaround so quick compared to traditional loans that can take weeks.
Will the daily payments hurt my cash flow?
The retrieval rate (the percentage of revenue drawn each day or week) is negotiated based on your sales volume so you retain enough cash for operations. However, daily automatic deductions can feel aggressive during slower sales periods. Before accepting an offer, calculate what the daily draw looks like against your typical low-revenue days, not just your average. If cash flow is a concern, ask about weekly or semi-monthly draw options instead of daily.
Is this a loan?
Technically, no. Revenue-based financing is structured as a purchase of your future receivables, not a loan. The funder is buying a portion of your future revenue at a discount. This distinction matters because it means these agreements are typically not subject to the same lending regulations as traditional loans, so it's especially important to read and understand the full agreement before signing — including any personal guarantee clauses, default terms, and whether early repayment reduces your total cost.
How much can I borrow?
Funding amounts typically range from $5,000 to $2 million, depending on your monthly revenue, time in business, and overall business health. The amount you're offered is usually tied to your average monthly revenue — most funders will advance 1 to 1.5 times your monthly sales volume. Higher revenue and a stronger cash flow history generally qualify you for larger advance amounts and better factor rates.
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Contact Us*The content provided on this page reflects the opinions and insights of Ridgepeak Capital, based on our research, methodologies, evaluations, and various additional considerations. This information is accurate as of the initial publication date. Ridgepeak Capital makes every effort to update and maintain the accuracy of this content, however, the information may differ from what you may find on other platforms. All information is presented without any warranty. We encourage you to carefully review the terms and conditions, relevant policies, contractual agreements, and all applicable details of the financial institution when considering offers. The ranges mentioned here do not represent pre-qualified offers. Ranges may be greater or less based on the information provided in your business financing application. Ridgepeak Capital may receive compensation from financial institutions reviewed on this page if you proceed to obtain business financing through them.