What Company Is Offering:
How It Works:
Revenue Based Financing is a special kind of loan. Instead of requiring a business to pay a fixed amount and over a fixed amount of time , RBF loan entitles the lender to a fixed percentage of gross revenues until a multiple of invested capital (typically 3 – 5x) is returned. Revenue Based Finance lenders trade steeper default, timing and rate of return risk for richer potential returns than those offered by traditional business lending (i.e. banks).
Who Can Use It:
The businesses they invest in must either be profitable or close to profitability. Typically, the companies that can meet these criteria have between $1 and $10MM in sales with gross margins of 50% or more. Mainly they are focused on internet and mobile technology companies, they also invest in service businesses, media companies and even “non-technology” companies with the right characteristics and leadership.