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What is Revenue-Based Financing?Revenue-based financing (RBF), also known as royalty-based financing, is a capital-raising method where businesses receive upfront funding in exchange for a predetermined percentage of their future gross revenues. Unlike traditional loans with fixed monthly payments, revenue-based financing adapts to your business performance—you pay more when revenues are strong and less during slower periods.
For businesses asking "what is revenue-based financing," it represents an increasingly popular alternative financing option that may serve as a small business cash advance for companies that may not qualify for traditional bank loans or want to avoid giving up equity in their company.
For businesses wondering "how does revenue-based financing work," the revenue-based financing process at Crestmont Capital involves several straightforward steps:
You submit an application to us. Our approval process for revenue based financing focuses primarily on your sales history and revenue potential rather than requiring perfect credit scores or extensive collateral. We review 3-4 months of bank statements and basic business documentation.
Once approved, funds can be deposited within 24 hours, allowing you to immediately address financial needs with our small business cash advance solution. Funding amounts typically range from $5,000 to $600,000 depending on your business's monthly revenue and financial history.
As your business generates revenue, you pay us a predetermined portion based on your actual performance. Payments for revenue-based financing are typically calculated as a percentage (commonly 10-20%) of your daily, weekly, or monthly revenue.
How it works in practice: If you receive $50,000 with a 15% daily remittance rate and generate $5,000 in daily revenue, you would pay $750 per day ($5,000 × 15%). On slower days with $2,000 in revenue, you would pay only $300 ($2,000 × 15%).
Once the agreed-upon total amount is paid—usually 1.5 to 3 times the original funding amount—your obligation is fulfilled. There are typically no prepayment penalties, allowing you to pay off the financing faster during strong revenue periods.
Apply for revenue-based financing
Understanding the key differences helps business owners make informed financing decisions about revenue based financing:
Payment Structure: Fixed monthly payments regardless of revenue
Credit Requirements: Typically require 680+ credit scores
Collateral: Usually requires substantial collateral or personal guarantees
Time to Funding: 25-45 days on average
Documentation: Extensive financial documentation required
Cost: Lower interest rates (6-12% APR typically)
Payment Structure: Flexible payments based on actual revenue
Credit Requirements: More lenient (often 500-625 credit scores)
Collateral: Typically no collateral required
Time to Funding: 3-7 days on average
Documentation: Minimal documentation (bank statements and ID)
Cost: Higher effective cost (factor rates 1.1-3x the original amount)
Businesses that don't qualify for traditional bank financing often turn to revenue-based financing companies like Crestmont Capital to access growth capital.
Revenue-based financing works best for specific types of businesses with consistent revenue streams:
Companies generating consistent monthly revenue and demonstrating sustainable business models are excellent candidates for revenue based financing. We typically require:
Companies with healthy profit margins (typically 30% or higher) can comfortably accommodate the percentage of revenue dedicated to repayments while maintaining operational profitability with revenue-based financing.
Businesses seeking capital to expand operations, purchase equipment, increase inventory, or invest in marketing campaigns benefit from the flexible structure and quick access to funds through small business cash advance programs.
Business owners who don't want to dilute their equity stake or give up control to investors find revenue-based financing attractive. You maintain 100% ownership without providing investors with board seats or decision-making authority.
Companies that may not meet strict bank requirements due to credit history, lack of collateral, or insufficient time in business can access capital through revenue-based financing firms like Crestmont Capital.
Revenue based financing can be used for various business purposes:
Payments adjust based on your actual revenue performance with revenue-based financing. During slower periods, you pay less, helping manage cash flow more effectively. During strong revenue months, you pay more and complete your obligation faster.
The application and approval process is significantly faster than traditional bank loans with revenue-based financing companies. Many businesses receive funding within 24-48 hours of approval, allowing them to capitalize on time-sensitive opportunities.
Revenue based financing typically doesn't require you to pledge personal assets or business property as collateral, reducing your personal financial risk.
You retain 100% ownership of your business without giving up equity to investors or providing board seats to outside parties. This is particularly valuable for business owners who want to maintain complete control through revenue-based financing.
Approval is primarily based on your sales history and revenue potential rather than perfect credit scores. We accept credit scores as low as 500-625, making it accessible to businesses that don't qualify for traditional financing through revenue-based financing firms.
Unlike traditional loans with rigid monthly payments, revenue-based financing aligns with your business cycle, providing breathing room during seasonal fluctuations or slower periods.
Before pursuing revenue based financing, business owners should carefully evaluate these factors:
The total cost of revenue-based financing is typically higher than traditional bank loans. The repayment amount usually ranges from 1.5 to 3 times the original funding amount.
Cost Example:
Compare this to a traditional bank loan at 9% APR over 3 years, which would cost approximately $7,968 in interest for the same $50,000.
We require businesses to demonstrate consistent monthly revenue, typically ranging from $10,000 to $25,000 minimum. Businesses must have sufficient revenue to accommodate the payment percentage while maintaining profitable operations.
Since payments are taken as a percentage of ongoing revenue (commonly 10-20%), businesses must carefully project their cash flow to ensure they can comfortably meet obligations while covering operational expenses.
Revenue-based financing works best for short-term capital needs (typically 6-18 months) with clear revenue-generating potential. Businesses seeking long-term growth capital may find traditional term loans more cost-effective.
Speak with a financing specialist
While our qualification requirements for revenue based financing are generally more relaxed than traditional bank loans, businesses must still meet certain criteria:
Time in Business: Minimum of 6 months to 1 year in operation
Monthly Revenue: Demonstrated consistent revenue, typically $10,000 to $25,000 monthly minimum
Credit Score: Minimum personal credit scores typically ranging from 500 to 625
Business Bank Account: Active business banking account with regular deposits
Documentation: Basic documentation including 3-4 months of bank statements and government-issued identification
We take a different approach to underwriting compared to traditional banks and other revenue-based financing companies. Our primary focus is on your business's ability to generate consistent revenue and future sales potential.
Key evaluation factors include:
Revenue-based financing works best for businesses that:
✓ Need capital quickly (within 1-2 weeks)
✓ Have consistent revenue streams of $10,000+ monthly
✓ Want to maintain 100% equity ownership
✓ Don't qualify for traditional bank financing
✓ Have strong revenue history but limited collateral
✓ Experience seasonal fluctuations that benefit from payment flexibility
However, revenue based financing may not be ideal for:
✗ Brand new startups without established revenue
✗ Businesses seeking long-term, low-cost capital for major investments
✗ Companies with inconsistent or unpredictable revenue streams
✗ Businesses with very thin profit margins (under 30%)
Our team will honestly assess whether revenue-based financing makes sense for your specific situation.
At Crestmont Capital, we understand that every business is unique, and your financing should reflect that. As one of the leading revenue-based financing companies, our revenue-based financing program offers businesses the flexibility they need to grow without sacrificing equity or personal assets.
We've helped businesses access the small business cash advance capital they need to:
Get started with revenue-based financing
Understanding how does revenue-based financing work at Crestmont Capital:
If you're considering revenue based financing for your business, follow these steps:
📞 Call Us: 800-949-0401
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When comparing revenue-based financing firms, Crestmont Capital stands out for:
What is revenue-based financing?
Revenue-based financing is a funding method where businesses receive upfront capital in exchange for a percentage of future revenues. Unlike traditional loans, payments fluctuate with your business performance.
How does revenue-based financing work?
Revenue based financing works by providing you with a lump sum upfront. You then repay a percentage (typically 10-20%) of your daily, weekly, or monthly revenue until you've repaid the agreed-upon total amount (usually 1.5-3x the original funding).
What are revenue-based financing companies?
Revenue-based financing companies like Crestmont Capital are alternative lenders that provide capital to businesses in exchange for a percentage of future revenues rather than fixed monthly loan payments.
Is revenue-based financing the same as a small business cash advance?
While similar in structure, revenue based financing specifically ties repayment to revenue percentages, while small business cash advance often refers to merchant cash advances tied to credit card sales. Both offer flexible repayment based on business performance.
What types of businesses work with revenue-based financing firms?
Revenue-based financing firms typically work with established businesses that have consistent monthly revenue of $10,000+, strong profit margins, and need quick access to capital without giving up equity.
How much does revenue-based financing cost?
Revenue based financing typically costs 1.5 to 3 times the original funding amount. While more expensive than traditional loans, it offers flexibility and doesn't require equity dilution.
Crestmont Capital provides flexible revenue based financing solutions designed to support your growth without giving up equity or pledging personal assets. Our straightforward process and quick funding times help you seize opportunities and achieve your business goals.
Whether you're seeking what is revenue-based financing information, comparing revenue-based financing companies, or ready to apply for small business cash advance funding, we're here to help you understand how does revenue-based financing work for your specific situation.
Contact us today to discuss your revenue-based financing options with one of the leading revenue-based financing firms in the industry.
DISCLAIMER: This content is for informational purposes only and does not constitute financial, legal, or business advice. Business financing decisions should be made in consultation with qualified professionals who understand your specific circumstances. Terms, rates, and requirements are subject to change.
Note: Information current as of November 2025. Rates and terms are subject to change.
