Revenue-Based Financing (RBF)
Revenue-based financing (RBF) is a funding structure where repayment is calculated as a percentage of monthly revenue until a fixed multiple is repaid — distinct from MCA in repayment calculation methodology and typically priced more competitively for high-revenue stable businesses.
Why This Matters
RBF differs from traditional MCA in several ways: monthly revenue-share rather than daily/weekly fixed payments, often longer repayment terms (12-36 months), typically lower factor multiples (1.30-1.60 typical), and underwriting focused on revenue stability over MCA's emphasis on daily cash flow. RBF has emerged primarily for SaaS, subscription businesses, and recurring-revenue ecommerce — businesses with predictable monthly revenue that supports the monthly payment structure. Major RBF providers (Pipe, Capchase, Clearco, Lighter Capital) compete with traditional MCA funders for high-revenue stable businesses, often winning deals on price and structure flexibility.
Frequently Asked Questions
Frequently Asked Questions
How does RBF differ from MCA?
RBF uses monthly revenue-share repayment versus MCA's daily/weekly fixed payments. RBF typically prices lower (1.30-1.60 multiples vs. 1.30-1.50 MCA factor rates) for the same merchant. RBF underwriting emphasizes revenue stability and recurring revenue patterns; MCA emphasizes daily cash flow and bank statement health.
What businesses suit RBF over MCA?
SaaS companies, subscription businesses, e-commerce with stable monthly revenue, and any business with predictable monthly revenue supporting monthly-payment structures. Businesses with lumpy or seasonal revenue typically fit MCA's daily/weekly structure better than RBF's monthly structure.