Revenue-based finance
Explore funding linked to your business revenue
Revenue-based finance can provide funding that is repaid by reference to your business’s sales. It may be relevant if you have an established revenue stream and need money for stock, marketing, staffing or growth.
Wize Finance can help you explore whether this type of funding fits your business. Tell us how you generate revenue, how it changes through the year and what you need the funding to do.
How revenue-based finance works
A provider assesses your business’s revenue and offers funding on agreed terms. Repayments may be calculated as a share of eligible sales, so the amount collected can change as revenue rises or falls.
The name covers different agreements. A common structure agrees a fixed total repayable upfront and collects a share of eligible revenue until it is repaid. If that total is collected sooner, the fee does not necessarily fall, so compare both the total cost and the time taken to repay. Other agreements use a different charging structure. An agreement may also include minimum payments, a repayment deadline or other conditions. The actual contract determines your obligations.
| Stage | What happens |
|---|---|
| Business assessment | The provider reviews sales, finances and the funding requirement |
| Offer | You receive the proposed amount, costs, collection method and repayment terms |
| Funding | The money is provided under the agreed arrangement |
| Repayment | Collections follow the contract, which may link payments to eligible revenue |
When it may fit
This route may be worth exploring where a business generates repeat sales but needs to spend ahead of receiving enough cash to fund its plans.
Examples include buying stock ahead of a busy period, investing in an online sales campaign or supporting growth in a subscription business. Ecommerce, software and other businesses with recurring contracts may have relevant revenue streams, but the provider’s criteria and the quality of the business’s finances matter more than the sector label alone.
Revenue-linked payments still reduce the money available for other expenses. The business needs to understand whether it can meet the agreement through both stronger and weaker trading periods.
Revenue-based finance and merchant cash advances
A merchant cash advance is commonly based on future card takings. Revenue-based finance can describe arrangements linked to a broader business revenue stream, depending on the provider.
The labels can overlap. Compare the revenue included, how payments are calculated, what is collected and the full cost rather than choosing by the product name.
Related page: Merchant Cash Advance.
What to compare before accepting funding
Do not assume that revenue-based funding is interest-free, guarantee-free or free of credit checks. These features depend on the provider and contract.
When another route may fit better
If you need predictable scheduled repayments, a business loan may be worth comparing. A business line of credit may suit a changing cash requirement, while stock finance or invoice finance may fit a need tied to goods or unpaid business invoices.
Wize Finance can discuss these alternatives alongside your revenue and funding plans. You do not need to select a product before making an enquiry.
Revenue-based finance questions
Is revenue-based finance the same as selling shares?
It is different from equity investment, where an investor receives a shareholding. Check the actual funding agreement, including its repayment and ownership terms, before proceeding.
Will repayments always fall when sales fall?
Not necessarily. Revenue-linked collections may change with sales, but minimum payments, deadlines or other contractual obligations can still apply.
Can a business without revenue use this type of funding?
Providers offering revenue-based facilities normally need an existing revenue stream to assess and collect against. If you’re pre-revenue, tell Wize Finance about your plans so we can explore other funding routes, including Startup Business Loans.
How Wize Finance helps
Tell us the funding amount, purpose and how your business earns its revenue. Our team reviews the enquiry and discusses the options. Where appropriate, we introduce you to a relevant provider, which assesses the application and sets out any offer.
Discuss funding for your next stage
Tell us what you want to achieve and how your business trades. We can help you explore revenue-based finance and alternatives that may fit your plans.