Revenue-Based Financing
Funding where repayment is tied to a percentage of ongoing business revenue rather than a fixed amount.
Revenue-based financing describes funding structures where repayment scales with the business’s actual revenue, rather than requiring a fixed payment regardless of how sales are going. Merchant cash advances are one common example, but the term applies more broadly to any structure tying repayment to income.
This can make repayment feel more manageable during slower periods, since the amount owed adjusts along with revenue.
Related Terms
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