Comparing Top Revenue-Based Financing Companies

Disclaimer:
Information
in
the
revenue-based
financing
articles
is
provided
for
general
information
only,
does
not
constitute
financial
advice,
and
does
not
necessarily
describe
Biz2Credit
commercial
financing
products.
In
fact,
information
in
the
revenue-based
financing
articles
often
covers
financial
products
that
Biz2Credit
does
not
currently
offer.

How
to
Choose
the
Right
Lending
Partner
for
Your
Business?

For
any
small
business,
financing
is
crucial
to
a
company’s
growth
chart.
Aligning
the
business
goals
with
the
right
type
of
funding
is
where
most
small
businesses
struggle
with.
One
of
the
financing
options
that
most
small
businesses
tend
to
opt
for
is

revenue
based
financing
(RBF).
There
are
many
advantages
with
other
funding
options,
too,
but
what
works
for
revenue-based
financing
(royalty-based
funding)
is
its
non-dilutive
and
flexible
repayment
features.

However,
as
much
as
choosing
the
right
funding
is
important,
it
is
also
vital
that
businesses
choose
the
right
lending
partner
to
see
them
through
this
journey.
That’s
why,
in
this
article,
we
will
discuss
RBF
and
compare
a
few
popular
revenue-based
financing
companies
so
that
you
can
choose
the
best
option
for
your
business.

3
Key
Takeaways 

Flexibility
and
Cash
Flow
Management:
Revenue-based
financing
provides
capital
in
exchange
for
a
percentage
of
the
company’s
future
revenue.
Its
repayment
terms
align
with
a
business’s
regular
cash
flow,
which
reduces
financial
burden
during
low
revenue
months.

Fast
Access
to
Working
Capital:
Compared
to
traditional
bank
loans,
most
revenue-based
financing
companies
tend
to
process
applications
faster,
allowing
businesses
to
get
the
funds
they
need
within
a
short
duration.

Multiple
Financing
Options:
Online
lenders
like
Biz2Credit,
Square
Capital
and
Shopify
Capital
provide
tailored
financing
options
designed
to
meet
the
unique
needs
of
different
businesses,
no
matter
what
industries
they
belong
to.

What
is
Revenue-Based
Financing
(RBF)?

In
layman’s
terms,
revenue-based
financing
is
a
type
of

alternative
funding
method
which
offers
capital
in
exchange
for
a
percentage
of
company’s
gross
revenue.
Most
traditional
bank
loans
levy
fixed
monthly
installments
that
may
make
it
difficult
for
businesses
with
fluctuating
monthly
revenue
to
repay
the
loan
during
lean
periods.
So,
the
repayment
is
proportional
to
monthly
income
earned,
which
does
not
put
a
strain
on
a
firm’s
regular
cash
flow.
It
differs
from
equity
financing
too
as
it
does
not
require
borrowers
to
dilute
their
company’s
equity.
Rather,
lenders
receive
a
percentage
of
the
business’s
monthly
revenue
on
an
ongoing
basis.

This
financing
option
is
often
processed
faster
than
traditional
bank
loans,
making
the
required
capital
available
within
days.
This
is
perfect
for
businesses
with
urgent
capital
needs.
Another
feature
of
RBF
is
that
it
does
not
require
collateral
to
get
the
funding,
making
it
easier
for
firms
without
significant
assets
to
seek
necessary
funds. It
is
also
less
restrictive
than
traditional
bank
loans,
which
allow
businesses
with
low
credit
scores
or
substantial
assets
to
get
funding
without
a
lot
of
trouble.

What
is
a
Revenue-Based
Financing
Company?

Revenue-based
financing
companies
offer
a
unique
financing
solution
that
links
repayment
with
a
business’s
monthly
revenue.
These
lenders
cater
to
different
business
needs
and
industries.
Since
these
companies
provide
businesses
with
fast
access
to
capital
and
flexible
repayment
options,
it
becomes
vital
for
business
owners
to
compare
their
offerings
and
find
the
best
fit.

Why
Would
a
Small
Business
Use
RBF?

Most
small
businesses
face
fluctuating
cash
flows,
making
them
not
the
best
applicants
for
traditional
loans
with
fixed
monthly
payments.
That’s
where
revenue-based
financing
comes
into
play.
It
provides
a
financing
solution
to
small
business
owners
and
entrepreneurs
to
get
the
funding
required
and
repay
it
with
a
percentage
of
their
future
revenue.
This
flexible
repayment
structure
allows
businesses
to
pay
only
more
during
months
with
high
revenue
and
less
during
slow
periods.
This
flexibility
also
ensures
that
companies
do
not
strain
their
cash
flow
and
have
steady

working
capital
whenever
required.
This
flexibility
also
makes
it
a
far
less
risky
option
for
both
the
lender
and
the
borrower.

Benefits
of
Revenue-Based
Funding

There
are
multiple
advantages
to
opting
for
a
revenue-based
funding
option.
Let’s
check
a
few
of
them:

• 
  Flexibility
  in
  Repayment:
  The
  major
  benefit
  of
  opting
  for
  RBF
  is
  its
  flexible
  repayment
  structure.
  Since
  there
  is
  no
  fixed
  repayment
  amount,
  it
  becomes
  easier
  for
  businesses
  to
  repay
  the
  loan
  even
  during
  those
  periods
  when
  the
  income
  is
  low.
• 
  No
  Equity
  Dilution:
  Unlike
  equity
  financing,
  
  RBF
  does
  not
  require
  business
  owners
  to
  give
  up
  any
  share
  of
  their
  company.
  This
  feature
  makes
  it
  popular
  with
  entrepreneurs
  wanting
  to
  retain
  complete
  business
  control.
• 
  Fast
  Access
  to
  Working
  Capital:
  Revenue-based
  financing
  companies
  often
  provide
  a
  quick
  application
  process.
  This
  allows
  small
  businesses
  to
  receive
  funding
  typically
  within
  24-48
  hours,
  making
  it
  a
  good
  choice
  for
  companies
  needing
  capital
  urgently.
• 
  Lower
  Cost
  of
  Capital:
  RBF
  generally
  has
  a
  lower
  capital
  cost
  than
  traditional
  bank
  loans.
  This
  makes
  this
  
  type
  of
  financing
  solution
  cost-effective
  for
  many
  businesses.

Currently,
Biz2Credit
stands
out
in
the
revenue-based
financing
sector.
This
is
mostly
due
to
its
competitive
offerings,
lower
cost
of
capital,
and
fast
application
processing.
Applicants
can
pre-qualify
for
the
financing
within
60
seconds
to
get
an
initial
estimate
of
how
much
principal
amount
could
be
provided.
All
these
features
make
Biz2Credit
a
go-to
lending
partner
for
businesses
looking
for
flexible
funding
options.

How
Revenue-Based
Financing
Works

Here
is
a
quick
outline
of
how
the
RBF
process
works:

1. 
   Application:
   Application
   for
   the
   funding
   solution
   starts
   with
   businesses
   submitting
   documentation
   on
   their
   monthly
   revenue,
   credit
   score,
   and
   overall
   financial
   health.
2. 
   Approval:
   Once
   the
   lender
   thoroughly
   assesses
   the
   documents,
   an
   initial
   estimate
   or
   amount
   is
   offered.
   If
   the
   applicant
   agrees
   to
   the
   amount,
   submits
   all
   the
   final
   paperwork,
   and
   signs
   the
   agreement,
   the
   agreed-upon
   funding
   amount
   is
   disbursed.
3. 
   Repayment:
   As
   RBF
   repayments
   are
   made
   as
   a
   percentage
   of
   monthly
   revenue,
   it
   allows
   businesses
   the
   flexibility
   to
   pay
   higher
   repayment
   amounts
   during
   months
   with
   higher
   revenue,
   and
   in
   months
   with
   lower
   income,
   they
   pay
   a
   lower
   repayment
   amount.

To
understand
more
about
Revenue-Based
Financing,
read

revenue
based
funding

Comparing
Top
Revenue-Based
Financing
Companies

As
mentioned
above,
selecting
the
proper
funding
for
your
business
is
not
enough.
It
is
absolutely
crucial
to
choose
the
right
lending
partner,
too.
Businesses
must
compare
key
elements
such
as
funding
amount,
minimum
credit
score
requirements,
repayment
terms,
and
other
additional
fees.

Let’s
look
at
some
of
the
best
revenue-based
financing
companies
and
check
out
what
they
offer:

1.
Square
Capital

• 
  Funding
  Amount:
  Up
  to
  $350,000
• 
  Minimum
  Credit
  Score:
  Not
  specified,
  but
  businesses
  must
  use
  Square
  for
  payment
  processing.
• 
  Repayment
  Terms:
  Automatic
  deductions
  from
  daily
  sales
  make
  it
  easy
  to
  manage
  payments
  and
  align
  them
  with
  cash
  flow.
  Borrowers
  have
  to
  pay
  their
  minimum
  amount
  every
  60
  days.

2.
Kapitus

• 
  Funding
  Amount:
  Up
  to
  $5
  million
• 
  Minimum
  Credit
  Score:
  650
  FICO
  score
• 
  Repayment
  Terms:
  Based
  on
  a
  percentage
  of
  monthly
  revenue,
  Kapitus
  offers
  flexible
  payment
  frequency.
  Payments
  are
  conveniently
  debited
  from
  the
  borrower’s
  bank
  based
  on
  an
  agreed-upon
  percentage
  of
  the
  business’s
  revenue
  daily,
  weekly,
  or
  monthly.

3.
Credibly

• 
  Funding
  Amount:
  Up
  to
  $600,000
• 
  Minimum
  Credit
  Score:
  500+
  FICO
  score
• 
  Repayment
  Terms:
  Repayments
  vary
  as
  they
  are
  linked
  to
  monthly
  revenue.

4.
Shopify
Capital

• 
  Funding
  Amount:
  Up
  to
  $2
  million
• 
  Minimum
  Credit
  Score:
  Not
  specified
• 
  Repayment
  Terms:
  Loan
  amount
  should
  be
  repaid
  within
  18
  months.

5.
PayPal
Working
Capital

• 
  Funding
  Amount:
  Up
  to
  $200,000
• 
  Minimum
  Credit
  Score:
  Not
  stated
• 
  Repayment
  Terms:
  The
  applicant
  must
  make
  a
  minimum
  repayment
  every
  90
  days.

6.
Biz2Credit

• 
  Funding
  Amount:
  Up
  to
  $6
  million
• 
  Minimum
  Credit
  Score:
  575+ FICO
  score
• 
  Repayment
  Terms:
  Biz2Credit
  charges
  a
  percentage
  of
  monthly
  revenue.

Conclusion

For
small
businesses
and
startups
looking
for
a
flexible
funding
option
to
balance
their
fluctuating
monthly
income
and
fuel
their
business
growth,
revenue-based
financing
is
an
apt
solution
as
it
eases
the
burden
on
fixed
monthly
payments.
Today’s
funding
market
has
plenty
of
loan
providers
with
specific
financial
products
customized
to
meet
the
unique
needs
of
businesses
from
different
industries.
The
current
top
providers
are
listed
above,
with
Biz2Credit
leading
the
way
by
being
customer-focused
and
offering
more
affordable
terms
that
enable
enterprises
to
focus
on
their
business
goals.
It
is
important
that
before
applying
for
any

business
funding,
businesses
compare
these
providers
and
understand
what
they
have
to
offer
and
whether
the
offerings
suit
them
or
not.

FAQs

What
is
revenue-based
financing
for
small
businesses?

Revenue-based
financing
offers
funding
in
lieu
of
a
percentage
of
the
company’s
monthly
revenue.
Instead
of
fixed
monthly
installments,
repayment
is
proportional
to
monthly
income
earned,
which
does
not
put
a
strain
on
a
firm’s
regular

cash
flow.
This
flexibility
makes
it
very
suitable
for
businesses
with
fluctuating
revenue
streams.

What
are
the
top
revenue-based
financing
companies?

Some
of
the
top
revenue-based
financing
companies
in
the
market
are
Biz2Credit,
Square
Capital,
Kapitus,
Credibly,
Shopify
Capital,
and
PayPal
Working
Capital.
Each
of
these
lenders
have
different
criteria
and
offer
customized
funding
packages
to
meet
unique
needs
of
businesses
from
different
industries.

What
factors
should
be
considered
when
comparing
revenue-based
financing
companies?

While
comparing
revenue-based
financing
companies,
analyze
the
funding
amount,
minimum
credit
score
requirements,
repayment
terms
&
integration
with
payment
processors
offered
by
these
lenders.
Understanding
these
factors
will
help
the
small
businesses
choose
the
right
funding
provider.

Frequent
searches
leading
to
this
page

financing
companies
for
small
business,
revenue
based
financing
companies,
top
revenue
companies