Bank loan vs Revenue based finance
Both give you capital without selling equity. A bank loan asks for fixed repayments and usually security. Revenue based finance takes a share of monthly revenue until a fixed total is repaid.
| Criterion | Bank loan | Revenue based finance |
|---|---|---|
| Repayment | Fixed instalments | Percentage of monthly revenue |
| Security | Often required | Rarely required |
| Cost | Lower for strong borrowers | Higher, set as a fixed multiple |
| Eligibility | Profit and trading history | Recurring revenue and growth |
| Speed | Weeks | Days |
Subscription and ecommerce businesses with predictable revenue but thin profits often fail bank tests. Revenue based funders underwrite the revenue itself, connecting to payment and accounting data to decide quickly.
Because repayments rise and fall with sales, a slower month does not create a cash crisis. That flexibility is what you pay the higher price for.
If you qualify, a bank loan is almost always cheaper over the full term. The repayment multiple on revenue based finance can look modest, but when repaid quickly the effective annual cost climbs sharply.
Profitable businesses with security should start with the bank. Fast growing recurring revenue businesses that cannot meet bank criteria will find revenue based finance quicker and more forgiving.
No. It is a funding agreement, not an equity investment.
Usually, but the total repayment amount is often fixed, so early repayment rarely saves money.
Not sure which route fits? Describe the requirement once and we will structure it and approach the providers whose criteria match. No upfront fees — charges are due only once funding is in place.
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