Revenue-Based Financing

A funding model where a business receives capital upfront and repays it through a fixed percentage of ongoing revenue until a predetermined total amount is repaid, without giving up equity.

Revenue-based financing is attractive to founders who want capital without diluting equity and without the rigid fixed repayments of a traditional loan. Repayments flex with revenue, reducing pressure during slow periods.

A founder accepts £50,000 in revenue-based financing and agrees to repay 8% of monthly revenue until £65,000 has been repaid. In strong months she repays more quickly; in slower months the obligation is proportionally smaller.