Which Companies Revenue-Based Financing Is Best for
This often means SaaS companies, but those with steady MRR (monthly recurring revenue) can also find revenue-based financing to be a suitable option.
There are several revenue-based financing companies willing to help you, but it is important to know whether your business is a good fit for it. Small businesses that may be interested in this form of financing include the following:
Companies Too Tiny For Venture Capitalists
Several businesses are way too small to draw in venture capital investments, although they still have strong revenue streams that can grow and can stay sustainable for long. Revenue-based financing can be suitable for companies that fit this mold, as lenders make loans on the basis of growth potential, and do not look for the kind of returns that VCs demand.
Businesses Unable to Get Other Financing
RBF can be a good choice if you fail to qualify for more conventional working capital business loans. Some companies may find that although their recurring revenues are strong, they are too new in business or lack the assets or personal credit profile to be approved of other startup loans. Revenue-based financing can help these businesses with the expansion capital they require to grow their business more quickly than they would be able to in a different situation.