Quick action lets companies make the most of opportunities that come along, but sometimes funding your needs can be tricky. Whether you want to expand your business or adjust to a sudden change in the market, revenue-based business loans can be a great way to secure extra capital.
What Are Revenue-based Loans?
Revenue-based business loans are an alternative type of loan that is growing in popularity. They are well suited to small- and mid-sized companies that need a loan on short notice.
As the name implies, revenue-based loans are tied to the business's gross revenue. The loan is repaid at a rate that scales with the borrower's gross revenue rather than having a fixed repayment scheme.
Revenue-based loans are regarded as a hybrid of the debt and equity lending models since they combine many of the best features of both. They let you preserve your control over your business without exposing it to the risks that come with other loan types.