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Everything You Need to Know about Revenue-Based Financing

How confident are you that your new business will have a successful launch?

Millions of companies are founded in the US every year. Unfortunately, a good percentage of them fail within their first year of operation. Most business managers report the lack of working capital as their biggest shortcoming even if their business has been in operation for a long time. If you are a business owner or manager who does not want to sell equity or accumulate bank debt but still needs business funding, revenue-based financing might be your best bet.

Here’s what you need to know about revenue based business financing.

What is Revenue-Based Financing?

Revenue-based financing is a business funding solution that allows businesses to pledge their future revenues against a current investment by financiers. Many businesses need financial support to complete specific business operations, including covering the cost of tasks like purchasing new inventory or expanding the office space. Business owners can receive such financial support from revenue-based financing firms by promising a percentage of their future sales revenue as repayment for the business funding.

How Does Revenue-Based Financing Work?

Typically, businesses have to either sell shares to investors or sell debt instruments in exchange for business funding. Revenue-based business funding is a middle-ground between those two options, making it a non-dilutive funding option. This small business funding solution works based on the number of recurring sales your business can generate over a specified period of time.

Is Revenue-Based Financing Right For Your Business?

While it is a great business funding option, revenue-based financing is not suitable for all types of businesses. It is going to be a great option for you if your business deals with products or services that can generate recurring monthly sales, e.g. SaaS providers and subscription services. This is because revenue-based financing can only work for you if you are confident in your ability to reach a certain sales target every month. Make sure to discuss every aspect of this business funding option with reliable funding specialists before applying!

Two clients going through a document with a business advisor

Take Advantage of Our Same-Day Business Funding Solutions!

As your trusted funding specialists, our team at Redline Capital Inc. can provide tailored solutions to your business funding needs within 24 hours.

Whether you need to obtain business working capital or set up a business line of credit, we can help you do it. Our application process is simple, too. Just get in touch with our team, fill out and submit your application, and sit back as we review it. You will be able to access your business funds in no time!

Click here to see which of our business financing services you might need.

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