What is revenue-based financing?

Revenue-based financing is a structured advance: a lender gives you a lump sum today in exchange for a fixed percentage of your future revenue until a predetermined total is repaid. Unlike a traditional loan, there’s no fixed monthly payment — you pay more in strong months and less in slow months.

The simple math: you receive $50,000 today and agree to repay $65,000 over time via a 10% holdback on daily ACH deposits. When you do $5,000 in a day, $500 goes to repayment. When you do $1,000, $100 goes. The total payback is fixed; the timing flexes with your business.

Revenue-based financing vs. MCA — what’s the difference?

The two products are very similar — both are advances against future revenue, both use a factor rate, both fund in 24 hours. The key differences:

Repayment source: MCAs are traditionally repaid via card-processor holdback (a percentage of daily credit/debit card sales). Revenue-based financing is repaid via ACH from your business bank account (works for cash-heavy businesses, B2B businesses, and anyone without card sales).

Eligible businesses: RBF is more flexible — trucking, contractors, B2B service businesses, and SaaS companies all qualify. MCAs traditionally require card sales.

Cost: Roughly equivalent. Factor rates 1.15-1.49 depending on credit and revenue.

For most owners, the two products are interchangeable. The Broker Shop shops both.

Who qualifies for revenue-based financing?

The minimum file:

Revenue: $10,000+ in monthly deposits. $15K-$25K opens better rates.

Time in business: 6+ months. 12+ months for best terms.

Credit: 500+ FICO. Higher credit drops your factor rate.

Bank account: Active business checking account in good standing — no recent NSF events (max 2-3 in 90 days).

Industry: Nearly all industries qualify. RBF is particularly strong for service businesses, B2B, trucking, and contractors.

Real revenue-based financing scenarios

Scenario 1: HVAC contractor doing $45K/month, 2 years in business, 595 credit. Need: $30K for new truck + advance materials. RBF placed: $30K @ 1.35 factor, ~7 month term. Daily ACH: ~$185.

Scenario 2: B2B marketing agency doing $80K/month MRR, 4 years in business, 700 credit. Need: $100K to fund a new contract before client payment. RBF placed: $100K @ 1.18 factor, ~6 month term. Daily ACH: ~$575.

Scenario 3: E-commerce brand doing $35K/month, 18 months in business, 620 credit. Need: $40K for Q4 inventory buy. RBF placed: $40K @ 1.32 factor, ~8 month term. Daily ACH: ~$220.

How to get the best revenue-based financing offer

Five things drive a better RBF rate:

1. Use a broker. Going direct to one lender gets one offer at that lender’s price. The Broker Shop sends your file to the right lenders simultaneously and brings back competing offers.

2. Clean bank statements. No NSFs, consistent deposits, healthy average balance.

3. Submit 4 months of statements (not 3). More history = lower perceived risk.

4. Apply before 10 AM EST. Lets the lender process today and quote same-day.

5. Don’t hide existing positions. Lenders see existing MCAs/RBF on bank statements anyway. Transparency upfront leads to a consolidation-style offer instead of a small second position.

Frequently asked questions

How does revenue-based financing differ from a loan?
A loan has fixed monthly payments and a fixed interest rate. Revenue-based financing has a fixed total payback (factor rate × advance amount) but variable timing — payments scale up in strong months and down in slow months. No fixed monthly obligation.
How much does revenue-based financing cost?
Factor rates typically run 1.15-1.49. Example: $50K advance at 1.30 factor = $65K total payback. The dollar cost is $15K. Effective APR varies based on how fast you repay — faster repayment = higher effective APR, but same total dollars.
How fast does revenue-based financing fund?
24 hours is standard. Same-day funding is possible for clean files submitted before 10 AM EST. The Broker Shop has placed RBF deals with funds wired same business day.
Can I prepay revenue-based financing?
Yes, but the total payback is fixed regardless of how fast you repay. Some lenders offer early-payoff discounts — ask before signing. Even without a discount, faster repayment frees up cash flow for new growth investments.
Is revenue-based financing reported to credit bureaus?
Usually not to personal credit, unless you default and the lender pursues collection. On-time repayment doesn’t affect your FICO. Some lenders report to business credit bureaus (Dun & Bradstreet, Experian Business) — on-time payments can boost business credit.
Can I get revenue-based financing with bad credit?
Yes — RBF lenders accept credit scores down to 500. The primary qualifier is monthly business revenue, not personal FICO. Owners with 540-580 credit and $25K+ monthly deposits get funded routinely.