Revenue-Based Financing

Revenue-Based Financing allows small businesses to raise funds by pledging a percentage of future, ongoing revenues in exchange for capital provided by a lender. 

Revenue-Based Financing is different than debt financing. Interest is not paid on an outstanding loan balance and there are no fixed payments. Instead, payments are proportional to a firm’s performance, offering a flexible, patient source of financing.

Revenue-Based Financing Education

Learn more about how Revenue-Based Financing works with our educational video series.

Created in partnership with Next Street, this program looks at Revenue-Based Financing basics, shows an example of a loan, discusses its pros and cons and helps you compare to other financing options. Click on the videos to learn more.

Part 1: Introduction

Part 3: Pros & Cons

Part 2: Case Study Example

Part 4: Comparing Loan Options

Details on Revenue-Based Financing

  • These terms are subject to change.

    • Loan amounts of $100,000 to $500,000

    • Must be in business 2+ years.

    • Term length is flexible:

      • 3 years - 1.3X multiple

      • 4 years - 1.4X multiple

      • 5 years - 1.5X multiple

    • Monthly payment: 8% of total monthly revenue

    • Cap APY/APR: 20%

    • Origination Fee: 5%

    • No prepayment penalty

  • Eligible businesses can be from any industry and at any stage of the business life cycle — from startup to mature — however AltCap is initially targeting entrepreneurs that are looking for capital to fuel significant growth. Revenue-based financing is not meant to use to finance normal working capital needs — i.e. to maintain existing levels of business activity — or to refinance existing debt.

    An AltCap Business Development Officer can help you decide if revenue-based financing is right for your business.

  • To apply for a revenue-based financing, you’ll be asked to provide:

    Personal Documentation

    • Two forms of ID (each signer) – One with a picture other with a name only

    Business Documentation

    • Business Plan (if the business is under one year in operation)

    • EIN (Tax ID) Form

    • Articles of Organization / Incorporation

    • Certificate of Good Standing

    • Operating Agreement (for LLC) or By-Laws (for Corporations)

    • Business Insurance/Liability Insurance

    Financial Documentation

    • Three years of financial projections

    • Last three years of business tax returns including all schedules

    • Last three years of financial statements

    • Business Debt Schedule

    • Last six months of business bank statements

  • Si necesita un préstamo para pequeñas empresas y necesita ayuda en español, comuníquese con Karina Lopez al (833) 549-2890 o karina@altcap.org.

  • If you have an existing revenue-based financing loan and have questions about your loan terms or if you need to update your information, please contact Viva Young at 816-269-7809 or viva@altcap.org.

    If you need to make a payment on your existing AltCap loan, please contact Viva Young at 816-269-7809 or viva@altcap.org.Item description

  • Small business owners who have questions about the application process should contact a Business Development Officer at info@altcap.org or (833) 549-2890.

    If you are ready to begin the process, select the Start the Process button below and follow the directions to submit an Intake Form.