Revenue-Based Financing for Small Businesses

Business owners researching revenue-based financing are often comparing it to a traditional bank loan.

A bank loan typically carries a fixed monthly payment and an interest rate set before funding begins, along with collateral and credit requirements that can be harder for some small businesses to meet. Revenue-based financing sizes your remittance to your business's revenue, rather than relying primarily on your credit and collateral the way a bank loan does.

Revenue-based financing also provides funding as a single lump sum, similar to a bank loan, but unlike a line of credit, where you draw funds as needed instead of receiving one deposit.

Small businesses have increasingly turned to revenue-based financing as a flexible and accessible way to fund growth. Unlike a traditional loan, revenue-based financing lets you secure capital without giving up equity or meeting strict credit requirements. Your remittance amount is based on your business's revenue, sized to fit your business rather than a one-size-fits-all payment. This approach means ECG evaluates your business on its revenue performance rather than credit alone, which can open access to capital for businesses a bank might turn away.

Small businesses have used revenue-based financing to fund initiatives like expansion projects, marketing campaigns, inventory purchases, and hiring, giving them capital without giving up equity.

A seasonal business like a landscaping or nursery operation often sees revenue swell in spring and summer, then taper off heading into winter. Revenue-based financing can help a business like this access capital sized to its typical revenue, useful for stocking materials or bringing on crew ahead of the busy season. A restaurant navigating a slower month between holiday rushes might use the same structure to access capital for payroll and inventory, based on its revenue history rather than requiring collateral a bank might ask for.