Royalty-Based Financing
Financing repaid as a percentage of ongoing revenue or sales, rather than fixed payments or an equity stake, until a set repayment cap is reached.
Repayment scales with the business’s actual revenue, similar in spirit to revenue-based financing, so payments are naturally lower during slower periods and higher during strong ones, and the arrangement ends once the agreed total (the advance plus a return multiple) has been paid.
It’s attractive to businesses that want growth capital without giving up equity or committing to a fixed loan payment, particularly in product or IP-driven businesses with a clear, trackable revenue stream.
Related funding options
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