A Revenue Based Financing investment is an instrument that has some equity attributes and some loan attributes. For instance, unlike a bank loan - we do not require fixed periodic repayments, personal guarantees or liens over your company. Unlike equity investment - our financing terms do not include voting rights, control or dilution to the shareholders.
Unlike an ordinary bank loan, in which you need to pay the lender the interest rate and amortization regardless of your cash-flow situation, in RBF if you have low revenues for a period – you will pay low Monthly Royalties.
The Cap is decided case by case and depends on several business factors and on the amount you receive from us. Typically, the Cap will be in the range of 1.3-1.5 times. For example, if we gave you $1MN you will need to pay us back a total of $1.3-1.5MN after 3 years.
No. We take no pledge or lien over your company or shares and we request no personal guarantees.
Typical the process takes between 2-4 weeks and mainly depends how quickly you can provide us the information (mostly KPIs and financial information) which we need in order to approve the loan.
There is no fixed interest rate which you need to pay us like in a bank loan. There is also no periodic amortization of a loan. Instead, you will pay us back a fix percentage of your collected revenues each month until the earlier of: 3 years or when you reach a certain fixed amount (Cap).
We call these payments Monthly Royalties and they vary between 2%-8% of your collected revenues.
You will pay the Monthly Royalty (fix percentage of your previous month’s collected revenues) each month until you reach 3 years or the Cap (the earlier of).
We look to finance any tech business which has some recurring revenues. Ideally, a the startup will have more than 10 customers, over 20% revenue growth and minimum of $50k of monthly revenues.
RBF investment does not restrict you from issuing new equity to investors. Additionally, at your choice and at any time you can pay back the amount (during the 3 years), and there are no restrictions on selling your company.
It depends mainly on your revenues and growth rate. Typically, our investment size is in the range of $250k to $4M, and we can deploy additional funds down the road when your revenues grow.