Primarily by the repayment cap (multiple). Some providers quote an implied APR; costs vary with expected speed of payback.

Risk, revenue volatility, margin profile, retention/churn, cohort performance, industry, and provider competition.

Commonly 0%–5% of the funded amount. Confirm all setup, platform, and wire/ACH fees.

Some charge ongoing platform or data-access fees; get a full fee sheet.

Yes—model expected revenue and payoff timing. Faster growth repays sooner, raising your realized APR; slower growth lowers APR but prolongs payments.

Often no—cap is due regardless. Some offer early-pay concessions; get it in writing.

Yes, tied to revenue—your monthly cash outflow scales up or down.

Sometimes; many require the remaining balance to the cap, not just principal.

Common floors: $25k–$100k+ MRR for SaaS; $1M+ annualized for e-com (varies widely).

Not always, but gross margins and unit economics must support the share rate.

Bank statements, payment processor data, accounting exports, cohort metrics, churn/retention, LTV/CAC, SKU and channel mix.

Some do soft pulls; many focus on business performance and connected revenue data.

Less common than short-term loans; depends on structure and risk.

Often unsecured; occasionally a lien on receivables/fixtures or a UCC-1.

Yes—MRR, ARR growth, gross margin, net revenue retention (NRR), churn, CAC payback, and cohort durability.

Typically no; RBF needs active, attributable revenue.

Usually gross cash receipts (or GAAP revenue) for the period; confirm exact definition.

Monthly is common; some providers collect weekly or daily.

Read-only connections to bank, PSPs (Stripe/Shopify/PayPal/Amazon), or accounting systems.

Some structures step the share rate up/down based on thresholds; others are fixed.

Your payment drops proportionally, extending the time to hit the cap.

You repay faster; total cost (cap) is unchanged unless early-pay terms differ.

Common “soft” terms: 12–48 months. A long-stop clause can trigger a residual due at term end.

Usually flexible (growth, inventory, CAC), with prohibitions on illegal uses or insider distributions.

Typically no—payments flex with revenue instead of formal pauses. Hardship accommodations vary.

Possible but risky; stacking raises your total revenue share and can strain cash flow.

Seasonality naturally lowers payments in slow months and raises them in peak months; plan inventory and CAC accordingly.

Application, IDs, bank statements, payment processor connects, basic financials, cap table (if relevant).

Data-connected providers can approve quickly (sometimes 24–72 hours) for straightforward cases.

ACH/wire to your business account; tranches are common (draws tied to metrics).

Yes—some RBFs offer top-ups as revenue grows or milestones are hit.

Light to moderate—keep data connected, maintain insurance, no fraud, provide reporting, sometimes minimum margin.

Automated ACH pulls based on reported/connected revenue.

Often 1%–10%+ of monthly revenue depending on margin and cap.

About 1.2×–2.0× funded amount; 1.3×–1.8× is common.

Origination/admin fees may be net funded; clarify gross vs net cash to you.

You may breach covenants or trigger default remedies; reconnect promptly.

Contracts often allow verification via statements or accounting exports.

Sometimes—others are loans with revenue-adjusted payments. Legal form impacts disclosures and remedies.

Several U.S. states require cost-of-capital or TILA-like disclosures for commercial financing—expect standardized summaries.

Reputable RBFs rarely use COJs; verify the remedies section.

Late fees, increased share rates, access to bank statements, acceleration, or collections—depends on structure.

Often yes (notice filing). Ensure lien priority plays well with other lenders.

Usually as debt (liability) with effective-interest recognition over time; confirm with your accountant.

Principal reduces liability; the implied financing cost hits interest/financing expense.

Financing costs are generally deductible; confirm jurisdiction-specific rules with your CPA.

Your contract’s revenue definition governs payments—align it with how you recognize revenue.

When you want payment flexibility through revenue variability and wish to avoid monthly fixed debt service.

When you have frequent draw/repay needs and can secure a low-cost revolving facility.

RBF preserves equity and control for financing known growth loops; VC fits high-uncertainty, hyper-scale bets.

MCAs often take a % of card sales with daily holds; RBF uses broader revenue definitions and typically longer durations with a cap.

Factoring advances on specific invoices; RBF is portfolio-level revenue sharing—less operational friction but different cost dynamics.

Yes—common for e-com; pair with supply-chain terms to match cash cycles.

Yes, if CAC payback is short and predictable; model the share rate against gross margin and payback time.

Simulate 3 revenue cases (bear/base/bull). Ensure the share never pushes you below target operating cash.

Keep total revenue-linked payments (including other rev-linked deals) comfortably below gross margin and operating expense buffers.

Normalize to total cost (cap), expected payoff time, share rate, covenants, and operational friction (data/reporting).

Gross margin, CAC payback, churn/NRR (SaaS), inventory turns (e-com), seasonality, channel concentration.

Attribution risk—ensure tracking is accurate; avoid over-scaling into deteriorating CAC.

High—processor holds or marketplace suspensions can interrupt flows; maintain diversification and reserves.

Banking, PSPs (Stripe/Shopify/Adyen/PayPal/Amazon), accounting (QuickBooks/Xero), analytics (optional).

Reputable providers use read-only OAuth and SOC-2 practices; request security docs.

Usually—confirm how refunds/chargebacks adjust reported revenue.

Contracts define netting/offset rules—ensure returns reduce the payment base.

Some base payments on cash receipts; others on GAAP revenue—clarify to avoid cash squeezes.

Provide ongoing revenue data, maintain good standing/insurance, no fraud, sometimes min cash or restrictions on additional senior liens.

Often allowed with notice or limits; senior secured lenders may require intercreditor agreements.

Non-payment, data disconnects, covenant breaches, misrepresentation, insolvency, or change of control without consent.

If you sell the company, an accelerated payoff may be due up to the cap (or a negotiated settlement).

Some require diversification (e.g., no single customer >X% of revenue) or disclosure.

Yes—after consistent performance, providers may extend more capital or reset the cap.

New tranche + new cap; evaluate blended cost and total revenue share burden.

Ask for a payoff quote showing remaining balance to cap, any fees, and settlement instructions.

Yes—obtain a UCC-3 termination as proof.

Over-committing revenue share, stacking facilities, data dependency, seasonal slumps extending payoff, and caps that are too high for margins.

Opaque revenue definitions, unilateral share-rate increases, aggressive remedies, punitive long-stop terms, hidden fees.

If most revenue flows through one PSP/marketplace, a hold or suspension can disrupt payments and trigger breach.

Lower than equity dilution risk, but aggressive collections can harm vendor relations—vet provider conduct.