When it comes to financing your business, there are many solutions beyond complicated bank loans. Today we take a detailed look at one of those alternatives: revenue-based loans. Keep reading to learn more.
What Are Revenue-Based Loans?
As the name suggests, what makes revenue-based loans different is that they are not based on your company’s credit history or past performance, but on its expected revenue.
In revenue-based financing (or RBF, for short) you receive financing in exchange for a percentage of your organization’s future gross revenue.
Revenue-based loans are typically repaid in monthly installments until covering a predetermined amount which is usually the capital borrowed plus a fee.
Let’s see what this all means for your business.
The Benefits of Revenue-Based Loans
As any entrepreneur knows, financing is one of the hardest parts of business ownership.
Take, for example, bank loans. This is usually the first alternative that comes to people’s minds when they think of financing. However, taking out a bank loan without an impeccable or extensive credit history may prove impossible.
Banks are famously risk-averse and their stringent requirements are designed to weed out new businesses or entrepreneurs whose credit isn’t great.
Revenue-based financing is a great alternative if you fall into any of these categories, or if you just want to enjoy the benefits of RBF.
- Easier than bank loans. The cautious approach of banks means that you have to jump through endless hoops to apply for a loan — without any guarantee of getting approved. Revenue-based financing is a simpler, more efficient way to get funded.
- Don’t sacrifice equity. Revenue-based financing is known as a form of non-dilutive funding because it doesn’t require business owners to give up equity or ownership. If you want to power your business while retaining full decision-making control over your organization, a revenue-based loan is for you.
- Less stress. With a bank loan, you are under pressure to repay a predetermined amount every month. This may make you feel stressed, especially at times where your cash flow slows down. With a revenue based loan, on the other hand, you pay a percentage of your revenue, so you can breathe easy knowing that you don’t have to pay a fixed monthly installment.
Looking for Revenue-Based Loans? Contact Gellyfish Commercial
If you need financing in California, or anywhere in the United States, Gellyfish Commercial is here to help.
We are located in Riverside, and work with clients across a wide range of industries. Contact us today by email (firstname.lastname@example.org), telephone (877-800-4493), or social media (Facebook, Twitter, LinkedIn), to schedule a free consultation or to learn more about our financing solutions.