What is Your Experience with Revenue Based Financing?

by a searcher from University of Dallas

2 years ago

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?

2 likes
80 views
10 comments

searcher from Ivey Business School at Western University

Hey - I provide RBF for ecom businesses. Feel free to reach out if you have questions.

2 years ago | like reply | 0 likes

investor from Harvard University

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?

2 years ago | like reply | 2 likes

More on Searchfunder

Just Closed on My First Deal! Reflections and Takeaways for other Searchers

45,152 transactions are available on Searchfunder (now searchable by keyword)

Now everyone has unlimited IBISWorld access

Family office looking for traditional searchers

Examples of self-funded searcher websites

Investor seeking Self-Funded Search Deals

What are market terms for Seller Notes?

2 Best Ways To Find Motivated Sellers, Off-Market Deals

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.