Today Tom breaks down revenue-based financing for us. It is a hybrid of sorts: part loan, part credit card. It is similar to a loan because the business gets a lump sum of cash up front to use to finance the business’ growth, perhaps toward the purchase of an asset or to finance production by purchasing machinery. It is also a little bit like a credit card.
The thing that really sets it apart is how it is to be repaid. It will be repaid based on taking a percentage of ongoing revenue. As sales ebb and flow the revenue will likewise fluctuate. So, with a revenue-based financing deal the payments will fluctuate, too.
In a future episode Tom will explain how to know if a revenue-based financing deal is right for you and your business. Thanks for listening!
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