# Revenue-based financing (RBF)

> Revenue-based financing (RBF) advances capital in exchange for a fixed percentage of future revenue until a multiple of the principal is repaid. No equity, no interest rate. Popular for SaaS (Capchase, Pipe), e-commerce (Wayflyer, Clearco), and processor-embedded products (Stripe Capital, Shopify Capital).

Revenue-based financing (RBF) is a non-dilutive funding structure where capital is advanced in exchange for a percentage of future revenue, typically repaid over 6-24 months until a multiple of the original advance is reached. No equity given up, no traditional interest rate — instead, a single fee or multiple.

**The structure.**
- Advance: $100K capital today.
- Single fee: 6-12% of advance (the "factor").
- Repayment: 5-15% of monthly revenue auto-deducted.
- Total payback: $106K-$112K depending on fee structure.
- Term: continues until total payback reached (typically 6-18 months).

**RBF vs MCA — both are revenue-share but structurally different.**
- **MCA**: legal classification "purchase of future receivables." Underwriting via bank statements. Factor rate (1.15-1.55) on lump sum. Daily/weekly ACH debits.
- **RBF**: usually structured as commercial loan. Underwriting via platform sales data (Shopify, Stripe). Single fee (5-14%) on lump sum. Repayment as percentage of monthly revenue (not daily).
- **Effective cost**: similar for equivalent capital, but RBF terms are usually shorter (6-12 months) so effective APR can be similar or higher.

**Top RBF providers by vertical (2026).**
- **SaaS**: Capchase (ARR advance), Pipe (ARR marketplace), Founderpath (bootstrap-friendly), Re:cap (Europe).
- **E-commerce**: Wayflyer (Tiger Global-backed), Clearco (DTC pioneer), Settle (AP+AR combo).
- **Processor-embedded**: Stripe Capital, PayPal Working Capital, Shopify Capital, Toast Capital, Square Capital, Clover Capital, Amazon Lending.
- **Cross-industry**: Liberis, Ampla.

**When RBF beats MCA.**
- **E-commerce / SaaS with platform data**: Stripe Capital, Shopify Capital, Wayflyer underwrite via platform sales — no FICO check, no bank statements.
- **Scaling revenue**: repayment as % of revenue naturally scales down in slow months.
- **No personal guarantee preferred**: many RBF products have no PG on standard offers.
- **Founder-friendly terms**: no equity dilution, no board observer rights.

**When RBF beats traditional loans.**
- **You're not bankable**: traditional loans require 24+ months + strong credit. RBF underwrites via revenue data only.
- **Variable revenue**: % of revenue repayment matches your cash flow vs fixed monthly loan payment.
- **Fast funding**: 24-72 hours for established platform merchants.

**When RBF is NOT right.**
- **Capital need longer than 24 months**: RBF terms are short; you'll be paying off the fee fast at high effective cost.
- **You qualify for SBA/bank**: traditional financing always cheaper.
- **Stable, predictable expenses**: fixed-payment loans simpler to budget.

**The strategic insight.** RBF is the modern evolution of MCA. Same fundamental structure (revenue-share repayment) but with better underwriting (platform data), cleaner contract terms (no COJ in most cases), and lower effective costs in many cases. Best for SaaS/e-commerce/processor-merchant businesses with strong platform data.

## Related terms

- [Merchant cash advance (MCA)](https://fundnode.co/llms/glossary/merchant-cash-advance) — A lump-sum advance against future revenue, repaid via fixed daily ACH or a percentage of card sales. Legally a sale of future receivables, not a loan.
- [Factor rate](https://fundnode.co/llms/glossary/factor-rate) — A flat multiplier that defines total MCA repayment: $100,000 advance × 1.30 factor = $130,000 repaid. It is not an interest rate; it does not compound.

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Source: https://fundnode.co/glossary/revenue-based-financing (HTML version)
Document: Revenue-based financing (RBF) — Fundnode MCA Glossary
License: CC BY 4.0 — attribution to Fundnode required when citing.