What is Your Experience with Revenue Based Financing?

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August 31, 2021

by a searcher from University of Dallas in Houston, TX, USA

Looking to have a chat with anyone with experience executing a transaction using revenue-based financing. Would love to learn more about your experience.

What you would do differently?

How did you work RBF into your deal structure?

If your loan supported any sort of variable rate - how did you balance investor returns and other objectives around the variability of your business?

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commentor profile
Reply by an investor
from Harvard University in Denver, CO, USA
We are currently using CapChase for RBF and also talked to Pipe. We find it to be attractive junior capital, but certainly not a substitute for bank/SBA capital. Typical APRs are mid-teens, but occupy the same place in the capital structure as a mezzanine loan but come without any security, covenants, or warrants/equity upside, and are thus much more attractive overall. The amortization period (generally 12 months) seems onerous, but you can effectively roll it over indefinitely as long as your revenue base is flat or up. The due diligence process was extremely easy, we sent over some customer-level data on our recurring revenue, they sent back a proposal within a few days, and we were funded inside of two weeks.

What other questions do you have?
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Reply by a searcher
from Ivey Business School at Western University in Toronto, ON, Canada
Hey - I provide RBF for ecom businesses. Feel free to reach out if you have questions.
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