RevenueLoan Blog

February 3, 2011

RBF is hot, and heating up in Texas

Filed under: news — Christian @ 1:54 pm

Our beloved financing model – royalty based financing or revenue based finance (take your pick) – is apparently now the “hottest new development in venture capital”, according to the Dallas – Fort Worth Tribune.

This article does a good job of illustrating most of the benefits of RBF funding over other traditional models (VCs, banks, etc), but glosses over one important aspect: Flexible monthly payments.

I know that with the whole fiasco surrounding adjustable rate mortgages, we have all become gun shy of the “flexible monthly payments” wording.

But when that flexibility is tied to your company’s revenues (and not to some arbitrary number invented by some Wall Street flunkie), that means the flexibility works in your favor. Slow sales over the holiday season? An unexpected rise in gas prices impacted your revenues? Weather didn’t cooperate, and people couldn’t get to your store?

Whatever the reason for the down turn in your revenues, your RevenueLoan isn’t going to put you out of business like a typical bank loan would. Because your monthly payment is pegged at a percentage of your revenues. So your revenues drop, then your monthly payment drops, too!

The up side on this is where things get really interesting, though. If your revenues go up, your payments go up as well, and you pay off your loan sooner!

This flexibility means that RBF loans are probably one of the last places where there is still real Win/Win scenarios in small business finance.

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1 Comment »

  1. […] This post was mentioned on Twitter by Asher Bearman, Andy Sack, rlucas, RevenueLoan, RevenueLoan and others. RevenueLoan said: RBF is hot, and heating up in Texas http://wp.me/p19YTA-2f […]

    Pingback by Tweets that mention RBF is hot, and heating up in Texas « RevenueLoan Blog -- Topsy.com — February 3, 2011 @ 3:27 pm | Reply


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