#1 Revenue-Based Financing
Revenue-based financing is an exciting new kid on the block in the eCommerce financing world.
It is a funding method for businesses to raise capital from investors. The investors in turn receive a percentage of the company’s ongoing gross revenues as repayment for the money they invested.
It is becoming extremely popular among eCommerce businesses as an accessible form of low-risk capital. Investors’ decisions to provide revenue-based finance are usually backed by data. While this means your business must show that it is viable and profit-making, it also means that if you receive the funding you know that the investor believes you will succeed.
Businesses receive necessary cash without losing any control of their business or incurring debt. Investors receive a regular share of the business’s income until a predetermined amount has been paid back.
There are lots of great reasons to choose revenue-based financing including:
- Quick approval
- No guarantor required
- Flat fee repayments
These are only a few of the reasons that highlight how easy and cheap it is to acquire this type of financing for businesses. As we’ll learn about later in the article other finance options are costlier (loans) or dilute your company (investors). With revenue-based financing, you keep full control of your business, have access to the funding needed to grow, and pay back a flat fee based on your revenue.
There is an endless amount of success stories of businesses receiving revenue-based financing and going forward to generate millions!
In our opinion, this is the smartest eCommerce finance option available for any business looking to grow.