Revenue-based financing is the purchase of a fixed amount of a business's future receivables at a discount. The business receives a lump sum up front and delivers an agreed percentage of its daily or weekly sales until the total is complete. It is not a loan: there is no interest rate, no fixed monthly payment and no maturity date, and the payment amount rises and falls with sales.
Read more →A factor rate is a multiplier applied once to the amount advanced, not a rate that accrues over time. At a 1.25 factor, $50,000 advanced means $62,500 remitted in total, and that $12,500 cost is fixed the moment the agreement is signed. Because it does not accrue, remitting faster does not reduce the total the way paying off an interest-bearing loan early does.
Read more →Most applications receive a decision in under 30 minutes, and approved businesses are commonly funded within 24 to 72 hours after documents are signed. SBA loans are the exception and typically take weeks rather than days, because of the federal documentation involved.
Read more →There is no single cutoff score. Underwriting for revenue-based financing leans primarily on business bank activity — deposit size, consistency and how often the account runs near zero — rather than a personal credit score, so businesses with imperfect credit frequently qualify. Longer-term products such as term loans and SBA loans weigh credit history more heavily.
Read more →A short-term working capital application generally needs five things: government-issued ID for each owner holding 20% or more, three to six months of business bank statements (or a read-only bank connection instead), proof of business registration, your EIN, and a voided check for the business account. Larger and longer-term requests also call for tax returns, financial statements and a debt schedule.
Read more →Checking your funding options does not affect your credit score. The application is free, and underwriting is driven primarily by your business bank activity rather than a credit pull.
Read more →A merchant cash advance is a single lump sum repaid as a percentage of sales, priced with a factor rate fixed at signing. A line of credit is a reusable limit you draw against as needed, charging interest only on the drawn balance, so repaying early genuinely lowers the cost. An advance suits a one-time need with uncertain revenue; a line suits recurring, unpredictable needs.
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