The basic mechanics
A funder advances a lump sum and agrees a total repayment, usually expressed as a multiple of the advance. You then repay a fixed percentage of monthly revenue until that total is reached.
Busy months repay faster. Quiet months repay less. There is no fixed term, although most agreements expect repayment within one to three years.
How funders decide
Underwriting focuses on revenue quality: recurring income, churn, gross margin and growth. Many funders connect directly to your payment processor and accounting software, so decisions can arrive within days.
Working out the true cost
A multiple of 1.15 sounds cheap, but if repaid in nine months the annualised cost is far higher than the headline suggests. Model your expected revenue and calculate the effective annual rate before comparing with other options.
Frequently asked questions
Do I need security?
Usually not. The funder relies on your revenue rather than assets.
Is this suitable for seasonal businesses?
It can be, because repayments fall in quieter months.
Last reviewed: 2026-10-06