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What is revenue-based financing?

Revenue-based financing is a type of funding in which a company agrees to share a percentage of future revenue with an investor in exchange for capital up front. The loan payments are tied to monthly revenue, going up for strong-revenue months and down for low-revenue months.

Revenue-based financing

Why choose revenue-based financing?

  • Get the funding you need.
    Fast.

    Our secure online application is fast and easy, and companies can receive up to $500K in as little as 4 weeks. We can provide follow-on rounds in as little as 3—4 business days, up to $2M for companies that qualify.

  • Retain ownership and control of your business.

    We won’t ask for equity, personal guarantees, or a board seat. It’s your company.

    Looking for VC funding? Our funding can help you grow your company now so you give up less equity later.

  • Pay based on
    monthly cash flow.

    We understand that monthly cash flows can fluctuate, which is why we have payments that scale up or down with your net revenue. You’ll never have to write a fat check during a down month, like you would with a bank loan.

About our funding

For tech
companies only
Software, SaaS, tech services, subscription commerce, or similar businesses.
Capital
for growth
We fund product development, sales and marketing, new hires, and other growth strategies.
Funding when
you need it
You don’t need to borrow it all up front. We’ll provide further financing as you grow.
Retain
control
We do not take equity, require a board seat or have a say in how you run your business.
How much
can you borrow?
We will lend up to ⅓ of a company’s annualized revenue run rate. We lend $50,000 to $2 million per company.
What you
need to qualify
Revenue: $15,000 per month Gross margins: at least 50% Location: U.S. HQ or subsidiary
See if you qualify ›

Filling the funding gap: what's important to you?

Raising venture capital is a 3—9 month process. That’s precious time you could be using to build your business, develop your product, and acquire customers.

VC and angel funding for small, early-stage tech startups is tighter than ever and requires giving up equity. Most banks don’t have the loan products or underwriting models to help asset-light technology companies. Revenue-based financing is a good alternative for your growing tech company.

Bank Lighter Capital VC & Angels
10%
Expected Annual Return
15–30%
25–100%
Required
Personal Guarantees
None
None
2–6 months
Fundraising Period
4–6 weeks
3–9 months
Warrants / None
Equity
None
Own 20–40% of your company + board seat
675+
Personal Credit Score
Does not affect credit
Does not affect credit

A better deal than banks or equity

Revenue-based financing works differently from traditional bank loans and venture capital—there is no set interest rate, fixed monthly payment, or costly equity investment.

More flexible than the bank

We lend more to early-stage growth companies

  • Interest rates can be lower for bank loans than for revenue-based financing, but beyond small lines of credit, banks rarely lend enough for early-stage growth.
  • Bank loans contain complex covenants that can be difficult to navigate.

Monthly payments rise and fall with the ebb and flow of your revenue

Your monthly payments
Revenue loan rate
Monthly net cash receipts
  • Payments adjust to what your business can afford.
  • The payment rate is always below 10% to minimize the impact on your cash flow.

How fast you repay your loan depends on how fast your business grows

  • Our loans are normally repaid over 3–5 years, but if your revenue grows faster than planned, you can pay off the loan sooner.
  • Banks, on the other hand, can make it very difficult or expensive to terminate a loan early.
Far cheaper than equity

Our revenue-based financing uses a simple, transparent pricing model so you know your total commitment from day one

Revenue-based financing has two costs:

  • A repayment cap
  • Minimal legal expenses (usually around $3,500)

The repayment cap is calculated as follows:

Payment cap
Amount borrowed
Cost of funds

The cap is usually 1.3–1.8x the amount borrowed, paid back over the length of the loan (usually 3–5 years).

Venture capital is not free—in fact it is vastly more expensive in the long run

  • The equivalent “payment cap” for venture capital can be 10–20x the amount they invest in you—or more.
  • And initial legal fees and expenses can easily reach $30,000.

What is it like working with Lighter Capital?

We succeed when you succeed

Lighter Capital was founded in 2010 by a group of entrepreneurs and venture capitalists who believed there was a better way to fund growing technology companies.

Our funding is structured so that we win when you win. Our return depends on your company’s performance, meaning it’s in our best interest to work with you to help you grow. We can be involved as much or as little as you like. Together with our community of 150+ tech entrepreneurs and experts, we can:

  • Talk to you about your business and growth strategies
  • Connect you to our network of investors
  • Give you access to special services and offers from our partners
“Lighter Capital made the entire process simple and easy and showed a true interest in not only ensuring Lighter Capital was the right fit for our company, but that they could help VirtualQube grow by leaps and bounds.”
VirtualQube
Scott Gorcester,
Founder and CEO

An easy application process

Getting the funding you need to grow should be simple—no long applications or waiting weeks or months for answers. Our goal is to get you funded in 4 weeks so you can focus on your business.

Give an overview

To get started, fill out our secure form to give us a quick outline of your business.

Get to know each other

We’ll contact you to get more detailed financial information. Our investment team will have a short phone call with you to learn more about you and answer any questions.

Close the deal

By now we should both know if revenue-based financing is a good fit for your company. If it is, we’ll send you a term sheet and get you the funding you need to take your business to the next level.

Apply now ›