How it is typically used
Businesses use revenue-based funding when timing matters and repayment should be reviewed against sales activity.
- Inventory purchases or supplies
- Short-term opportunity costs
- Cash-flow bridges while receivables settle
Funding Structure
Revenue-Based Funding
Revenue-based funding is a working capital structure evaluated around business revenue patterns and repayment capacity.
Quick answer
Revenue-based funding is a working capital structure evaluated around business revenue patterns and repayment capacity.
No obligation to accept an offer. MerchantRunway is operated by MerchantRunway.com. MerchantRunway is not a direct lender. We may connect applicants with third-party funding providers. Approval, terms, rates, and funding amounts are not guaranteed.
What matters in review
Providers usually care about revenue consistency, average deposits, negative days, industry, and existing obligations.
- Recent bank statements are central
- Seasonality should be explained
- Existing funding positions affect capacity
Important tradeoffs
Revenue-based funding can be faster than traditional bank loans, but may carry higher costs. Owners should compare total repayment and cadence.
- Ask for clear cost disclosures
- Avoid stacking obligations without a plan
- Use it for revenue-producing needs
Documents usually needed
- Recent business bank statements
- Business identification and owner contact details
- Requested amount, intended use, and timing
- Existing funding obligations, if any
How approval is evaluated
Providers may review revenue consistency, deposits, time in business, industry, existing obligations, owner profile, and whether the requested capital fits cash-flow capacity.
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