Why Do Some Companies Turn to Revenue-Based-Financing Instead of Venture Capitalists?
Some companies will be growing at a sufficiently fast pace to soon be courted by VCs, but may not fancy the thought of diluting their business equity or handing over some level of control to that venture capitalist. With revenue-based financing, you are getting a business loan to be paid back to the lender that does not need the release of your equity stake, as you would need with funding from a VC.
While revenue-based financing can be ideal for companies that share the same thought process driven by similar situations like yours, there are many other things to consider before deciding whether this kind of loan is a good fit for you.
Once you identify the need for RBF comes the big question: where to get it from? For a start, there are many revenue-based financing companies which help small business likely yours. Finding a lender that offers RBF can be trickier than finding one for other, more standard, business financing options out there. Revenue-based loans are offered only by niche lending companies who often offer this kind of financing alone.