Rbf Revenue Based Financing

Revenue based financing is an alternative growth investment structure with different mechanics provisions and return profiles than either equity capital or traditional lending products.

Rbf revenue based financing. Revenue based financing or royalty based financing rbf is a type of funding or financing provided to an emerging or growing small enterprise in which an investor pumps capital into the businesses in return for a small percentage of ongoing gross revenue royalty every month. Revenue based financing or royalty based financing rbf is a type of financial capital provided to small or growing businesses in which investors inject capital into a business in return for a fixed percentage of ongoing gross revenues with payment increases and decreases based on business revenues typically measured as either daily revenue or monthly revenue. Revenue based financing also known as royalty based financing is a method of raising capital for a business from investors who receive a percentage of the enterprise s ongoing gross revenues in. It is first and foremost a debt instrument that is paid back by sharing in a company s revenue.

The arrangement has been beneficial to hunt a killer. In exchange for funding as your business generates future revenue a percentage of cash receipts usually between 3 8 are remitted monthly. The company will dole out the royalties until a percentage of the principal investment has been paid off. Know the pros and cons of revenue based financing to help you decide the right funding option.

Revenue based financing rbf is non dilutive funding based on your business s recurring revenue. Through rbf also known as revenue based financing investors get a percentage of the company s gross revenues in exchange for their investment. Rbf is considered a combination of debt and equity financing.