Revenue Based Financing Canada

In exchange for funding as your business generates future revenue a percentage of cash receipts usually between 3 8 are remitted monthly.

Revenue based financing canada. The payments are tied to monthly revenue increasing in strong revenue months and decreasing in low revenue months until the capital plus a multiple is repaid. The business must be based headquartered in canada. First the funding amounts are typically higher than a merchant cash advance. Revenue based financing sometimes known as royalty based financing was used by oil investors in the early 20th century to finance oil and natural gas exploration and later by the pharmaceutical industry hollywood and energy companies.

Qualifying for a revenue based business loan is much easier than qualifying for a traditional loan in most cases. Start up businesses can access capital that is somewhere between traditional bank financing and venture capital investments only they don t have to put up a personal guarantee or give up equity. The key advantage is simple. A new revenue based financing model is now available in canada as lighter capital extends its offering to canadian businesses.

Also known as royalty based financing rbf is a type of business loan designed to give high growth businesses access to the capital it needs to continue growing. The business must be open for at least six months at the time of application. Revenue financing also known as revenue based financing is a type of growth capital provided by timia to a start up in exchange for a percentage of future revenue. Investors began applying it to early stage companies in the 1980s.