Revenue-based finance explained
Revenue-based finance gives your business a lump sum that you repay as a fixed percentage of your monthly revenue. Good month? You repay more. Quiet month? You repay less. And unlike an MCA, it doesn't just look at card sales, so it works for businesses that get paid by bank transfer or invoice too.
Last updated: April 2026
How does revenue-based finance work?
The concept is simple. A provider gives you a lump sum upfront. In return, you agree to repay a fixed percentage of your monthly revenue until the total amount is paid off.
If your revenue is £50,000 one month and the repayment percentage is 10%, you pay £5,000 that month. If revenue drops to £30,000 the next month, you pay £3,000. The total amount you owe stays the same, but the speed at which you repay it adjusts with your business.
You receive
£30,000
Factor rate
x 1.3
You repay
£39,000
Illustrative only. Actual costs depend on the provider and your business profile.
RBF vs MCA vs term loan
All three serve different purposes. None is universally "better." Here's how they compare:
| Revenue-Based Finance | Merchant Cash Advance | Term Loan | |
|---|---|---|---|
| Repayments based on | Total monthly revenue | Daily card sales | Fixed monthly amount |
| Needs card payments? | Not always | Yes | No |
| Repayments flex? | Yes, with revenue | Yes, with card sales | No, fixed |
| Speed | 24-48 hours | 24-48 hours | Days to weeks |
| Good for | B2B, mixed income | Card-heavy businesses | Steady, established |
Who suits revenue-based finance?
RBF is a good fit if:
- ✓ Your revenue fluctuates and you want repayments that flex with it
- ✓ You don't take many card payments (service businesses, B2B, consultancy)
- ✓ You need cash quickly and can't wait for a bank loan
- ✓ You've been declined by a bank and want an alternative that assesses your business differently
Frequently asked questions
What is revenue-based finance?▼
Revenue-based finance (RBF) is a type of funding where you receive a lump sum and repay it as a fixed percentage of your total revenue each month. Unlike a traditional loan, repayments flex with your income. Good months you pay more, quieter months you pay less.
How is RBF different from a merchant cash advance?▼
The main difference is what repayments are based on. MCAs take a percentage of your card sales specifically. RBF takes a percentage of your total revenue, which can include bank transfers, invoices, and other income sources. RBF can work for businesses that don't take many card payments.
Do I need to take card payments to get revenue-based finance?▼
Not necessarily. Some RBF providers work off your bank statements and total revenue rather than card sales. This makes it an option for service businesses, B2B companies, and others who receive payments by bank transfer or invoice.
How much does revenue-based finance cost?▼
Like MCAs, RBF costs are usually shown as a factor rate or a flat fee on the total advance. Rates in the UK in 2026 typically range from 1.1 to 1.5 depending on your revenue, trading history, and sector.
How quickly can I get revenue-based finance?▼
Most RBF providers offer decisions within 24 to 48 hours. Some can fund on the same day. The process is similar to an MCA: you share your revenue data, get an offer, and funds arrive quickly after acceptance.
Real customers. Real reviews.
Verified on Trustpilot
“Repayments flex with our sales so quieter months aren't stressful.”
“Great service, slick, helpful and kept informed throughout the whole process. I have been able to push my business in the direction I want it to go as a result.”
Not sure if RBF or an MCA is the better fit?
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