What is Revenue-based Business Financing?
Revenue-based business financing is a form of business loan in which the mount of your monthly repayment is a percentage of your monthly revenue. This type of small business financing allows you to borrow money up front without pledging any assets as collateral. You pay the borrowed funds back as percentage of your future monthly revenue.
Business owners that find it difficult to pledge assets as collateral for other types of business loan may find revenue-based business financing to be a better option. As a small business owner, you can easily obtain a revenue-based business loan from investors through Globelend Capital.
How it Works
Revenue-based business financing is different from most other types of funding in terms of repayment. It is a suitable source of funding for small businesses looking to enlarge their operations and revenue. To obtain a revenue-based business loan, you’re not required to pledge any collateral, and this exactly why most financing firms are selective about whom they extend these loans to.
In revenue-based business financing, you’ll be required to pay the loan obtained with interest as a fixed percentage of your monthly revenue after injecting the loan into your business. This implies that your monthly payment will fluctuate, depending on the performance of your business. Also, there is no specific time within in which must repay the loan. It solely depends on your business revenue. The higher your business growth and revenue, the less time it will take to repay the loan.
Generally, the total cost of revenue-based business financing (i.e., principal payback + interest) could be up to 2.5x the amount borrowed. Prior to approving your revenue-based business financing, lenders will request appropriate documents so they can examine the performance of your business in terms of revenue generation.
Who Qualifies for Revenue-based Business Financing
Every entrepreneur and small business owner wants several ways to fund and grow their businesses. A small business in need of a loan can take advantage of revenue-based business financing. As a business owner, you should be able to kickstart further growth and development after you use the loan to improve your business.
Qualifying for revenue-based business financing is not so difficult, because it doesn’t require pledging any collateral. However, it is difficult to obtain for individuals, because lenders are very selective when offering these loans. Most financing firms want to work with specific companies, especially fast-rising small businesses.
Also, it is important to have a good credit score, bank statement history and loan history to get your revenue-based business loan approved quickly. Before approving your loan, lenders will review your business revenue and a plan of how you intend to increase it by using the loan.
Basically, any small business owner with a sound vision on how to grow his/her business can enjoy our revenue-based business financing.
The Advantages of Revenue-based Business Financing
There are several advantages to obtaining a revenue-based business loan. They include:
Substantial loan amounts:Small business owners can obtain a relatively large sum of money through a revenue-based business loan. With Globelend Capital, you can acquire a loan of up to 80% of your total expenses. However, it depends on the state of your business revenue.
Considerable repayment terms:Unlike most other business financing options, revenue-based business financing has no constraints in terms of repayment. It often takes longer to repay compared to similar forms of financing. The repayment terms depend on the monthly increases in your business revenue.
Versatility:Revenue-based business financing can be used for any business purpose, ranging from equipment purchases to inventory costs. Borrowers can take advantage of a revenue-based business loan to deal with these expenses.
Disadvantages of Revenue-based Business Financing
More Expensive:Revenue-based business financing is more expensive than most traditional business loans. The interest rate is higher, and the total amount you’ll pay back to the lender can be as high as 3x the amount borrowed. That’s a sky-high cost compared to other forms of financing.
No prepayment incentive:Considering that borrowers are required to pay back a huge amount of debt, lenders sometimes offer prepayment incentives such as discounted interest. This is done to make it easier for borrowers to repay their loan before the scheduled term limit. However, since a revenue-based business loan doesn’t have a specific payback time, lenders don’t offer prepayment incentives.
How to Apply for Revenue-based Business Financing
Many financial institutions offer revenue-based business financing. However, getting approved for a revenue-based business loan can be daunting – especially for individuals – because financial firms are very selective when offering revenue-based business loan to small business owners.
That’s where Globelend Capital comes in. For a quick and easy-to-approve revenue-based business loan, apply through our online platform now. We’ll connect you with top lenders who will be willing to offer you a revenue-based business loan with reasonable repayment terms and conditions.
Here are the documents you’ll need to apply for revenue-based business loan through us:
- A personal financial statement
- Driver’s license
- Business tax return
- Personal tax returns
- Business certificate or license
- Loan application history
- A plan for future revenue generation
Applying for Revenue-based Business Financing with Globelend Capital
Globelend Capital is committed to bridging the gap between top lenders and small business owners who want easily approved loans. We’ve helped thousands of small business owners secure a revenue-based business loan, and we’re confident we can find one for you.
If you’re willing to take out a revenue-based business loan, APPLY NOW.