WHAT IS THE DIFFERENCE BETWEEN REVENUE-BASED FINANCING AND A LOAN?
Revenue-based financing and loans differ in that they provide financing in exchange for a percentage of future revenue; whereas a loan provides a fixed amount of money that needs to be repaid over a set schedule with interest.
Revenue-based financing and loans are both methods of financing a business, but they have some key differences. Here are some additional points to consider:
Revenue-based financing can be a good option for businesses that have unpredictable or fluctuating revenue streams. Since remittances are based on a percentage of revenue, the amount due will adjust accordingly.
Loans typically have a set repayment schedule, which can be helpful for businesses that want to plan ahead and know exactly when the debt will be repaid.
Loans may require collateral or a personal guarantee, while revenue-based financing does not.
WHAT IS REVENUE-BASED FINANCING AND IS IT RIGHT FOR MY BUSINESS?
Revenue-based financing is a financing model where a business receives financing based on the sale of a percentage of its future revenue. Short, estimated terms are traditional with revenue-based financing, and give business owners the ability to plan ahead and make financial decisions with confidence.
Unlike traditional financing, revenue-based financing doesn't require the seller to make fixed payments on a regular schedule. Instead, the Purchaser takes a percentage of the Seller's revenue until an estimated predetermined amount has been remitted.
Revenue-based financing may be a good option for businesses that are generating revenue but don't have significant assets or collateral to secure traditional financing.
Estimated terms typically last between 2 and 10 months, which allows business owners to satisfy their financing quickly and avoid long-term financial commitments.
Estimated terms mean that the exact length of the term may vary slightly depending on the revenue of the business. This provides flexibility for both the Purchaser and the Seller.
It is also important to have a clear understanding of the revenue projections and how they will impact the remittance of the financing. A realistic and conservative revenue forecast can help ensure that the business can meet its financial obligations.
IS FACTORING THE SAME AS REVENUE-BASED FINANCING?
Factoring and revenue-based financing are two distinct financing options for businesses. While they may share some similarities, they have some important differences. Here are some points to consider:
Factoring is a method of financing where a business sells its accounts receivable to a third-party company, known as a factor, at a discount. The factor assumes responsibility for collecting on the invoices and pays the business a percentage of the invoice amount upfront. Factoring is typically used by businesses that need immediate cash flow and are willing to accept a lower amount in exchange for faster payment.
Revenue-based financing, on the other hand, is a type of financing where a business receives financing for the sale of a percentage of its future revenue. Unlike factoring, revenue-based financing does not involve selling assets. Instead, the investor provides capital to the business and receives a portion of future revenue until the agreed-upon amount is satisfied.
While factoring is typically used by businesses that need immediate cash flow, revenue-based financing is often used by businesses that have a strong revenue stream but need additional capital to grow.
Revenue-based financing is a more flexible option than factoring, as the remittance terms are tied to the business's revenue stream rather than a fixed schedule. Additionally, revenue-based financing can be a good option for businesses that may not qualify for traditional bank loans.
In summary, factoring and revenue-based financing are two distinct financing options for businesses, with different benefits and drawbacks. It's important to understand the differences between these options and choose the one that best fits your business's needs.
DO YOU OFFER SMALL BUSINESS LOANS OR CONSOLIDATION?
No. We solely offer revenue-based financing.
DO YOU HAVE A CUSTOMER PORTAL WHERE I CAN TRACK MY OFFER(S) AND financing(S)?
We have a customer portal where you can track your offers and financings. Our portal is designed to provide you with an easy and convenient way to stay up-to-date on the status of your applications. Once an agreement is sent, you can log in to the portal to see the progress of your financing application. Here are some key features of our customer portal:
Real-time updates: You can see the status of your financing application in real-time, including when it has been approved or denied.
Secure access: Our portal uses advanced technology to protect your personal and financial information, so you can rest assured that your data is safe.
Communication tools: Our portal also includes messaging tools that allow you to communicate with our team directly, so you can get quick answers to any questions you may have.
We believe that our customer portal is an essential tool for anyone who wants to track the progress of their financing applications quickly and easily. So, if you're already a merchant with financing from a Funding Metrics portfolio, please don't hesitate to get in touch!
Our team's objective is to communicate directly and transparently to guarantee clarity and comprehension.
Do you charge interest?
No. As a revenue-based financing company, we charge a fixed fee, which is not interest. Instead of traditional interest rates, revenue-based financing companies charge a fixed fee based on a percentage of the business's revenue. This fee is remitted over a set period of time until the total amount is satisfied.
WHAT ARE THE BENEFITS TO REVENUE-BASED FINANCING?
Flexible terms: Because the remittance of revenue-based financing is tied to a business's revenue, the amount remitted each month can fluctuate based on how well the business is doing. This can be beneficial for businesses that have seasonal or cyclical revenue patterns.
Quick access to capital: Revenue-based financing can be a faster and easier way for businesses to obtain financing compared to traditional financing, which can involve lengthy application processes and extensive due diligence.
Lower risk: Because revenue-based financing is tied to a business's revenue, Purchasers are typically more willing to take on riskier businesses that may not be able to obtain financing through traditional channels. This can be beneficial for businesses in industries that are perceived as high-risk.
Align incentives: Revenue-based financing aligns the incentives of the Purchaser and the Seller. The Purchaser benefits when the merchant's revenue increases, which incentivizes them to help the merchant grow their business.
what is your time in business requirement?
Our minimum time in business requirement is eight months. Please note that certain industries may have specific guidelines that require a longer time in business, such as 18 months, 24 months, or even up to 6 years.
How quickly can I receive financing?
It is possible to receive financing as early as the same day, but the speed of financing can vary based on the application and documents submitted.
When applying for financing, it is important to keep in mind that there are various factors that can impact the speed of financing. Some of these factors include the completeness and accuracy of the application and accompanying documents. To increase the chances of receiving financing as quickly as possible, it is important to ensure that all necessary documents are included in the application and that they are accurate and up-to-date.
Additionally, it is helpful to communicate with us throughout the application process to ensure that all requirements are being met and to address any questions or concerns that may arise.
WHEN WILL I BE ELIGIBLE FOR A RENEWAL?
In order to be considered for a renewal, it is important that you have remitted at least 50% of the existing financings purchased amount. This means that if you have not yet remitted at least 50% of the amount, you may not be eligible for a renewal at this time. However, if you have met this requirement, you may be considered for a renewal when the time comes.
Keep in mind that each financing provider may have their own specific requirements for renewals, so it is always a good idea to review your agreement and reach out to your provider if you have any questions or concerns.
What documents are required to apply for a renewal?
You will need to submit your three most recent business bank statements for your existing business bank account(s), four if your business located in California or New York. Additionally, submit new business bank account statements (if applicable), and you will be required to complete an updated bank verification.
Additional information or documents may be requested, but this will get you started.
SHOULD I GET IN TOUCH WITH LENDINI OR MY BROKER WHEN IT'S TIME TO RENEW?
You may contact Lendini directly or through your broker. Before you reach out, it's a good idea to gather some basic information about your financial situation. This might include your gross sales, balances of additional financing taken, and any existing debt.
We are headquartered in Bensalem, Pennsylvania, 30 minutes outside of downtown Philadelphia. We serve businesses located in the United States of America, excluding Utah.
HOW DO I DECIDE WHAT FINANCING PRODUCT IS RIGHT FOR MY BUSINESS?
To determine the right financing product for your business, you should consider factors such as your business's financial needs, creditworthiness, and cash flow. Additionally, you should research the various financing options available, such as revenue-based financing, loans, lines of credit, and crowdfinancing, and evaluate their terms and requirements to determine which one best fits your business's needs and goals. It may also be helpful to consult with a financial advisor or accountant for guidance.
Once you have considered your business's financial needs and evaluated the financing options available, it's important to understand the potential benefits and drawbacks of each option.
Revenue-based financing can be a good option if your business is generating consistent revenue, as it allows you to remit based on a percentage of your revenue.
It's also important to consider the long-term impact of the financing option you choose. Will the financing help your business grow and achieve its goals, or will it put your business at risk of accumulating too much debt?
Consulting with a financial advisor or accountant can provide valuable insights and help you make a well-informed decision. They can also assist with preparing a financial plan and projecting your business's cash flow to ensure that you're able to remit on time. Remember, taking the time to research and evaluate your financing options can help set your business up for success.
WHO CAN APPLY FOR REVENUE-BASED FINANCING?
Revenue-based financing is typically available for businesses that have a proven track record of generating consistent revenue. This means that startups or businesses that are not yet generating revenue may not be eligible. Additionally, some revenue-based financing providers may have specific industries or business models that they prefer to work with.
HOW CAN I APPLY?
Complete the application in the link below. A representative will contact you and request three to four months business bank statements along with standard identification. For businesses located in the State of California or New York, we require four months business bank statements. Additional documents may be requested based on underwriting requirements.
Disclaimer: All deals are subject to underwriting approval. The programs advertised on this landing page are not a commitment or guarantee from Lendini. Programs, fees and other terms & conditions on this landing page are subject to change without notice.