Revenue-Based Financing: What It Is, Pros, Cons
This lesson is an article published on nerdwallet.com.
Read the articleWhat you'll get
How revenue-based financing works: you get a lump sum and repay a fixed multiple of it out of a share of monthly revenue, so payments rise and fall with sales. It also lists the businesses it suits poorly, like seasonal, thin-margin or pre-revenue ones.
Do this week
Using your last three months of revenue, work out what a $50,000 advance with a 1.3x cap and a 5% revenue share would cost in total, and how many months it would take to repay.