A
great way for businesses to access money is
through revenue-based financing. It’s also sometimes
referred to as revenue participation or revenue
sharing funding. Revenue
financing is a loan to a company which is
paid back through a royalty on the revenues. Typically
this royalty is in the 2 to 5% range. With
revenue based capital, instead of selling ownership
in your company you sell rights to a percentage
of your company’s revenue for some period
of time. Funding
is commonly available up to 25% of a company’s
annual revenue. You receive money monthly,
sometimes equal to 10% of monthly revenues. To
qualify a company must have current revenue. When
you borrow money from a bank, you commit to
repayment and you commit to a specific rate of repayment. One
of the benefits of revenue funding is that it provides
a variable payment. If
revenue goes down, your payment also goes down
equivalent. This is extremely helpful in
seasonal
industries. Another
difference compared to a bank: lenders want
a personal guarantee and collateral. If you default
you may lose that collateral. Revenue
based financing typically has no collateral requirement.
There are also no personal guarantee requirements
for the founder unlike bank loans. This
funding can be used for many purposes including
growth capital. And there are no
restrictive
covenants like bank loans. Revenue
Financing is one of over 30 core funding products
available to you through our business
funding
suite.
Contact
me today to access money for your
business.
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