Your Result:

REVENUE-BASED FINANCING
and GRANTS!

REVENUE-BASED FINANCING

Revenue-based financing (“RBF”) is an alternative type of financing that has some features of debt and some features of equity. Essentially, you receive capital in exchange for a pledge to pay back that capital based on a percentage of your monthly revenue.

RBF has been around for many years, but its popularity (in terms of number of investors offering RBF) has increased in recent years.

RBF Benefits

  1. Non-dilutive - you don’t have to give up shares of your company

  2. Repayments based on revenue - unlike traditional loans, where you owe a fixed payment amount monthly, RBF is paid back based on a percentage of your revenues. This helps for businesses that have dips in their revenue due to seasonality or other factors - if you have a slower month, you'll owe the agreed upon percentage of the lower revenue amount your business generated.

  3. No personal credit score requirement - with bank loans/lines of credit and business credit cards, your personal credit score is a factor on your funding application, while RBF is structured based on your business

  4. Can be accessible if not yet profitable - some RBF providers will fund even if your company is not profitable yet, but you should have a path to profitability

  5. Generally no personal guarantee / collateral required - unlike traditional bank loans, which usually require a personal guarantee (legal agreement where you agree to repay the loan and/or collateral (pledge of your personal assets or income)

RBF Considerations

  1. Predictable revenue preferred - RBF providers generally prefer businesses with stable, recurring monthly/annual revenue streams

  2. High cost of capital - rates vary but are typically 2–10% of revenue, plus a fee (~5-15% of total funding)

  3. Timing - can take several weeks to 30 days or more to receive funding

  4. Limited business types depending on the investor - many focus on tech, software, e-commerce, service- and subscription-based businesses, since many businesses in these sectors have recurring revenue models, which gives the investor more confidence they will be paid back

  5. Limited funding amounts - generally RBF investors will not fund more than 3-4 months of your monthly revenue

GRANTS

Grants are commonly known as "free money." That's because you typically don't have to pay the money back, nor do the grant funders take shares of your company in exchange for the funding they provide.

Though grant programs are often competitive and typically do not provide feedback on your application, grants are available to a wide variety of businesses - from start-ups to established businesses, across industries, and both product-based. Grant programs tend to have a focus, such as:

  1. A particular industry (such as Consumer Packaged Goods, B2B, Healthcare, etc.)

  2. Business owner characteristics (such as women founders, Black founders, military-connected founders, founders with disabilities, etc.)

  3. A particular location (such as a particular city, county, or state)

While you may not have to pay interest or give up shares of your company in exchange for the grant money, you may still have to "pay" in the form of your time - for example, the time you put into completing the application (let’s be real, some grant applications can be long and tedious!), or other accompanying terms you may have to agree to in order to receive the grant, such as:

  1. Participating in an accompanying mentorship/training program

  2. Reporting to the grant administrator on how you used the funds or the impact that receiving the grant had on your business

Overall, we think grants are a good financing option for you based on the current status of your business!

You’re almost there! Keep scrolling for your suggested next steps and find out how we can support you. We look forward to helping you meet your financing goals!

Your Next Steps

Access our Business Grants Database

Our team has assembled a curated list of business grant programs for women, which is constantly updated and summarizes some of the Terms & Conditions of grants programs so you have a better idea of each program’s expectations.

Click the link below and enter the password FundWomenFounders

Schedule a financing strategy call with our CEO, Christine

Now that you’ve completed your assessment, it’s a great time to schedule your business financing strategy call!

Our CEO, Christine Saffold, an experienced financial expert and small business advisor, will help you chart your next steps to securing financing for your business and meeting your growth goals.