Revenue Based Financing Term Sheet

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.

Revenue based financing term sheet. From 50 000 to 3 000 000 within 30 days of application. In exchange for funding as your business generates future revenue a percentage of cash receipts usually between 3 8 are remitted monthly. For revenue share promissory note financing of ampled inc. Once the payments have totaled the funding amount plus an agreed upon multiple cap the repayment.

Investors inject growth capital in exchange for a percentage of monthly revenues. Revenue based financing a complement or alternative to equity financing for growing companies revenue based financing also known as revenue sharing or royalty based financing is a method of raising capital for emerging and high growth businesses. Revcap also known as revenue and or royalty based financing a short term debt product is a flexible method of attaining growth capital that has numerous advantages when compared to equity capital merchant cash advances purchase order financing and factoring. The payments fluctuate with the borrower s financial performance going up when revenue is strong and down when it is lower.

At lighter capital we have financed over 150mm in more than 550 rounds of reve nue based financing to over 300. Investors began applying it to early stage companies in the 1980s. The company the parties do not intend to be bound until they enter into definitive agreements regarding the subject matter of this term sheet. 25 000 as part of a 50 000 total raise types of investment.

Revenue based financing rbf is a loan in which repayments are based on a percentage of the borrower s monthly revenue rather than a fixed amount. This is the first comprehensive report about the rbf industry and its growth. Sample revenue share agreement amount of financing. 2 5 of borrower s gross revenues from all sources minus permittable offsets outlined below delivered to village capital in.

The promissory notes the notes will have the following principal provisions. Type of financing. Lighter capital the rise of revenue based financing 2 revenue based financing rbf is the leading alternative to equity financing for startups.