Revenue Share Agreement
A financing structure where a business repays capital as an agreed percentage of ongoing revenue rather than a fixed payment schedule, ending once a set total is repaid.
This structure is the underlying mechanism behind both merchant cash advances and revenue-based financing more broadly, tying repayment directly to how the business is actually performing rather than a calendar-based schedule.
Because payments flex with revenue, a revenue share agreement can ease cash flow strain during a slow period compared to a fixed loan payment, though total cost and repayment timeline become harder to predict precisely in advance.
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