Tips for Landing a Deal with a Revenue-Based Financing Provider
The following are some of the foremost ones.
Demonstrate Your Growth Potential
Revenue-based funding companies, as a rule, wish to see proof of both your profit margins and potential for growth. Some financiers want at least 1 to 2 years of solid financial results, with a minimum revenue of around $15,000 per month.
Show How You Will Use the Money
If you cannot specify how you will use the funds, then you are not prepared for a revenue loan or a royalty loan. Lenders want assurances you will use the funds they have given you for business growth-oriented activities. Sales and marketing are indeed good purposes to set aside residential real estate secured funding for.
Ensure the Numbers Work
Small business loans are not worth it if paying it back fully hobbles your business cash flow. Something like a $70,000 royalty deal made with a private investor makes sense for some business owners if sales are exponential and they require money in order to move to a much larger manufacturing facility and to purchase packing in bulk quantities. All is well if they can succeed in paying back the loan in time and reducing the royalties paid upon their product.