What Is Revenue-Based Financing? A Flexible Funding Solution for Growing Businesses

In today’s fast-paced market, many small and medium-sized businesses need capital to grow — but traditional loans can be rigid, slow, or simply out of reach. That’s where Revenue-Based Financing (RBF) comes in.

At Canfield Capital, we help businesses unlock growth with flexible funding solutions that work with your revenue, not against it. In this article, we’ll break down what revenue-based financing is, how it works, and why it might be the perfect fit for your business.

Understanding Revenue-Based Financing

Revenue-Based Financing, sometimes called Royalty-Based Financing, is an alternative funding option where a company receives a lump sum of capital in exchange for a fixed percentage of future revenue until a set amount is repaid.

Unlike traditional term loans with fixed monthly payments, RBF payments adjust in line with your actual sales. If your revenue is strong, you pay more that month. If sales dip, payments go down too.

Key feature: Payments are directly tied to your business’s cash flow.

How Does Revenue-Based Financing Work?

Here’s a simple breakdown of how RBF works:

1️⃣ Get Funded:You receive upfront capital to use however you need — inventory, payroll, marketing, equipment, or expansion.

2️⃣ Repay Through Sales:Each month (or week), you remit an agreed-upon percentage of your business’s revenue until you reach the total repayment amount (the original advance plus a pre-agreed fee).

3️⃣ Flexibility:Because payments flex with your revenue, there’s no fixed due date. The more you earn, the faster you repay. If business slows, you don’t get stuck with a payment you can’t afford.

Example of Revenue-Based Financing in Action

Let’s say you run a growing e-commerce store and secure $50,000 through revenue-based financing. You agree to remit 10% of your monthly sales until you repay $65,000 (the original funding plus the agreed fee).

• If you have a big sales month, you pay more, paying the balance off sooner.

• If you hit a slow month, your payment shrinks automatically.

No fixed term, no penalties for paying early — just a simple, flexible way to access working capital.

Benefits of Revenue-Based Financing

✅ Flexible Payments: Payments scale with your revenue. Busy season? Pay more. Slow month? Pay less.

✅ No Dilution: You don’t give up equity in your business — you stay 100% in control.

✅ Fast Funding: Many businesses get approved and funded quickly — sometimes in days, not weeks or months.

✅ Use Funds Freely: There are usually no restrictions on how you use the money — reinvest where your business needs it most.

✅ No Fixed Collateral Required: RBF is often unsecured, so you don’t have to risk personal or business assets.

Is Revenue-Based Financing Right for Your Business?

RBF works best for businesses with consistent, predictable revenue streams — like retail, e-commerce, restaurants, subscription services, or B2B companies with steady contracts.

If your business is growing but you need a cash boost to hire staff, expand inventory, launch new products, or bridge seasonal gaps — without rigid loan terms — revenue-based financing could be a smart solution.

Why Choose Canfield Capital for Revenue-Based Financing?

At Canfield Capital, we specialize in flexible funding solutions designed to meet the real-world needs of small businesses. With our revenue-based financing, you get:

• Simple, transparent terms

• Payments that adjust with your sales

• Fast approvals and funding

• No hidden fees or surprise costs

• A partner who understands your business

Final Thoughts

If you’re looking for a funding option that grows with your business — not against it — revenue-based financing might be exactly what you need.

Ready to learn more? Contact Canfield Capital today to see how our flexible working capital solutions can help you seize opportunities, manage cash flow, and fuel growth on your terms.