Revenue-based finance
An advance repaid as a fixed share of your future sales, plus a flat fee agreed up front. Repayments fall when sales are slow, but the fee can make it expensive, especially if you repay quickly.
- No security
How it works
Revenue-based finance gives you a lump sum based on your past sales. You repay it, plus a fee, by handing over an agreed percentage of your revenue until the total is paid.
- Sizing: offers are based on your revenue. One large provider says it typically offers 1 to 2 times monthly revenue.
- Cost: a flat fee or a multiple of the advance, agreed up front, instead of an interest rate. The total you repay does not change.
- Repayments: a percentage of daily or weekly revenue, collected automatically from your sales or payment accounts. When sales are high you repay faster, and when they are low you repay less.
- Who uses it: mainly online and direct-to-consumer brands, and subscription businesses, with steady sales they can show through connected accounts. It suits businesses that must buy stock or spend on marketing weeks before sales come in.
- Requirements: providers want a sales history. For example, one asks for at least 6 months of sales and an average of $10,000 a month.
It is close to a merchant cash advance, which is repaid from card takings. Revenue-based finance can be repaid from wider revenue.
Upsides and downsides
Upsides
- No shares given up
- Repayments fall when sales fall
- Fast decisions from your connected sales data
- Often no personal guarantee
Downsides
- A fixed fee can mean a high cost, especially if you repay quickly
- Takes a share of revenue every day or week
- Only for businesses with steady, trackable sales
Risks
- Cash flow squeeze while a share of every sale goes to repayments
- Taking repeated advances that eat into margins
What it costs
- How it is priced
- A flat fee, or a multiple of the advance, repaid as a percentage of revenue
- Costs that are easy to miss
- The flat fee is the same however quickly you repay, so the annual cost is high if you repay fast
- A share of your revenue is taken before you can use it
- Possible fees for missed or late collections
Based on your revenue. One provider typically offers 1 to 2 times monthly revenue.
Have a quote? Cost of a merchant cash advance or revenue-based finance: work out the APR-equivalent and total cost
Does it fit?
Could fit when
- You sell online or by card and have steady monthly sales
- You need to buy stock or fund marketing ahead of sales
Unlikely to fit when
- You have no revenue yet
- Your customers pay on invoice, not online or by card
- Your margins are thin, so a share of each sale is hard to give up
Who can use it
- Business types: Private limited company, LLP, Public limited company
- Needs sales (revenue)
- Trading for at least 6 months
- Steady, trackable revenue, usually online, card or subscription sales
- You connect your sales, payment and bank accounts so the provider can check revenue
Am I ready?
What a provider is likely to ask for. Tick what you have. Your ticks stay in this browser and nothing is stored. Checklist for all alternative and fast debt
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- Revenue history
- Accounts you can connect
- Margin check
Regulation and protections
Commercial finance (finance for businesses rather than consumers) is not generally subject to statutory conduct regulation in the UK. Read the contract carefully and check the provider's complaints process before you sign.
Types of provider: Revenue-based finance providers; E-commerce and payment platforms.
Also consider
Sources
- Wayflyer: Revenue-based financing: how it works, costs and examples (provider's own guide) · checked 7 October 2026
- British Business Bank: What is cash flow finance? · checked 7 October 2026