What revenue-based finance is
Revenue-based finance (RBF) gives a business an upfront sum. It repays that sum, plus a fixed fee, by handing over an agreed share of its revenue each month until the total is paid. One UK provider describes it as capital in exchange for a percentage of their future revenue. There is no interest rate and no fixed term. Strong months repay more and weak months repay less, so the time to repay moves with sales.
A merchant cash advance works the same way but takes its share from card sales only; see the merchant cash advance guide. This guide covers RBF repaid from total revenue, usually for online, subscription and software businesses.
RBF cost and payback calculator
Illustrative example figures. The default values are examples or dated published figures, not quotes or market rates. Inputs marked Example are our own illustrations, even where one provider’s published figure is shown beside them. Replace them with the figures in your own offer.
At this revenue the total is not repaid within ten years, so no annual figure is shown. Check the revenue share and revenue figures.
Important information. RaiseDebt publishes general information about UK business finance. It is not financial advice or a recommendation, and it is not an offer or invitation to borrow. RaiseDebt is not a lender and is not authorised by the Financial Conduct Authority (FCA). Calculator results are illustrative estimates based on the figures you enter, not quotes. Lenders decide eligibility, rates and terms, and may run credit checks. Borrowing by sole traders, partnerships and other individuals can be regulated by the FCA; you can check any firm on the FCA Register.
Schedule
Assumptions and definitions
- Total repayable = advance × (1 + fixed fee). The fee does not fall if you repay faster.
- Each month the provider takes the revenue share, or the minimum monthly amount if that is higher, until the total is repaid. The last payment is capped at what is left.
- The minimum monthly amount is a fixed sum: the percentage you enter × the total repayable (advance plus the fixed fee). It does not shrink as the balance falls. Agreements differ, so check how yours defines and tests it.
- Months to repay counts the final month as a fraction: the months before it, plus the last payment divided by the payment due that month (the revenue share or the minimum, whichever is higher). So 12 full months and a last payment of half the usual amount shows 12.5 months. The schedule lists every payment; the effective annual cost treats each payment as made at the end of its month.
- Revenue changes by the growth rate each month, starting from the average you enter.
- An upfront deduction is a percentage of the advance kept back at drawdown. You receive the advance less the deduction, but still repay the advance plus the fee, so the deduction is added to the cost and the effective annual cost is worked out on the amount you actually receive.
- Effective annual cost (estimate) is the internal rate of return (IRR) of the cash flows, meaning the money you receive after upfront fees and then every payment and fee, each at the date it falls. It is the annual rate r at which the present value of all of them is zero, Σ amount ÷ (1 + r)t = 0 with t in years. With monthly flows this is the same as (1 + monthly IRR)12 − 1. It is not a lender’s quoted APR and leaves out any cost not entered here.
- Results are rounded estimates for illustration and are not an offer of credit.
How to work out what an RBF offer costs
- Enter the advance and the fixed fee. The fee is a percentage of the advance, set when you sign.
- Enter the revenue share and your monthly revenue. Use a realistic revenue figure for the months ahead and, if you expect it to change, a growth rate.
- Add any minimum monthly amount or upfront deduction. Some agreements set a fixed monthly minimum, and some deduct an amount before paying out. Enter the minimum as a percentage of the total repayable and any deduction as a percentage of the advance.
- Compare the effective annual cost. A fee repaid in eight months costs more per year than the same fee repaid over a year. Compare the result with a term loan.
When businesses use it
RBF suits businesses with predictable revenue that will spend the money on something that pays back quickly, such as marketing or stock. One UK provider names ecommerce, SaaS and subscription businesses as the main users, and describes brands that stock up on inventory and shore up ad spend for the peak season and then repay.
It also appeals to founders who do not want to give up equity. One provider advertises no collateral, equity or personal guarantees, although that is not true of every provider (see security below).
It is the wrong tool for long payback periods or for businesses without revenue. The same provider’s guide says that once repayments drag out for longer than a year a fixed-term bank loan becomes more economical.
How much you can get
Offers are sized on revenue. One UK provider says most RBF providers cap advances at a third of the company’s annual recurring revenue (ARR) or four to seven times their monthly recurring revenue (MRR).
Published ranges vary widely by provider: £10k - £5m at one, £10k to £300k at another, and £5,000 to £20 million for ecommerce brands at a third. Providers sampled want around £10k a month of revenue and at least six months of trading.
Revenue share and term
The revenue share is the percentage of each month’s revenue that goes to the provider. One UK provider says shares are usually between 6-12% of revenue, and that some long-tail products take 1-3% of revenue for up to five years. This is the collection rate, not the price.
There is no fixed term, but providers work to an expected one. One provider’s offer builder lets you choose a term of 3 months to 12 months; its worked example uses 9 months. One UK provider’s card-linked version sets “a minimum monthly amount of up to 3% of the total amount owed” (check how your own agreement defines and tests the minimum), and may let you draw more once a third of the facility has been repaid. Any top-up carries its own fee.
What it costs
The price is a single fixed fee, agreed at the start alongside the revenue share (one UK provider). One provider’s published example uses a 6.8% fee.
A fixed fee is not an annual rate. You hand back the money in instalments over a few months, so you have the full advance for only part of that time. Example Illustrative only, not any provider’s terms: a £100,000 advance with a 10% fixed fee means £110,000 to repay. At 8% of £125,000 revenue a month, that is £10,000 a month for 11.0 months, and the effective annual cost is about 21.3%. Repay faster and the annual cost rises again, because the fee stays the same.
Some providers deduct an amount at drawdown, so ask for the net amount you’ll receive and work out the cost on that.
Some providers say there are no other charges. One card-linked provider’s terms say you will not pay late fees, early payment fees, or origination fees. Because the fee is fixed, ask whether settling early reduces it; we found no published early-settlement discount.
Security, guarantees and covenants
Most RBF is unsecured. One provider states it takes no collateral or lien over the business (provider page), and another says there are no mandatory personal guarantees. Others do take guarantees: one card-linked provider asks shareholders owning 25% or more of the company to give one. Check the agreement rather than the advert.
We found no traditional financial covenants in the published terms. The control comes from data instead: providers connect to your back-end systems, such as your accounting, payments and ad accounts, and watch revenue as it comes in. Card-linked products may also stop you changing your business bank account while the advance is outstanding (example terms).
Who qualifies
Expect a provider to ask you to connect your accounting and payment systems, and to look for steady revenue of around £10k a month and at least six months of trading. Providers serve different countries, so check that the UK is covered.
Regulation. Lending to limited companies and LLPs is outside the consumer credit perimeter no matter the loan amount, according to HM Treasury and the FCA. Many RBF products are also structured as a purchase of future revenue rather than a loan (example terms). For a limited company, RBF is usually not FCA-regulated. Sole traders and small partnerships should check, because some borrowing under £25,000 is regulated. Introductions by a broker can be regulated above £25,000 too. Check any firm on the FCA Register.
Who provides it
- Specialist RBF and ecommerce-finance firms, which underwrite from your sales, ad and accounting data (example).
- Embedded-finance providers offering revenue-linked advances through payment processors and software platforms (example terms).
- Specialist banks with recurring-revenue loans for software companies. These are term loans with covenants rather than RBF (UK Finance directory).
Pros and cons
Pros
- Repayments rise and fall with revenue.
- No equity is given up.
- Usually unsecured, and some providers take no personal guarantee.
- Decisions are based on connected data rather than accounts alone.
Cons
- Expensive once annualised over a short repayment period.
- The fee is fixed, so repaying faster does not save money.
- The amount is capped by your revenue.
- Does not suit long payback periods or pre-revenue businesses.
- Some providers take a personal guarantee, set a monthly minimum or restrict changes to your bank or payment provider.
- You share live financial data with the provider.
Frequently asked questions
How is revenue-based finance repaid?
A fixed share of your revenue goes to the provider each month until the advance plus the fee has been repaid. Busy months repay more and quiet months repay less (one UK provider). Source: UK RBF provider blog
How much can I get?
Offers are sized on revenue. One UK provider says most cap advances at a third of annual recurring revenue. Published ranges run from £10k - £5m at one provider, £10k to £300k at another and £5,000 to £20 million at a third. Source: UK RBF provider blog; UK RBF provider funding page; RBF provider serving UK businesses (Wayflyer), comparison page
What does it cost?
Usually a single fixed fee. One UK provider’s published example uses a 6.8% fee. Because the fee is fixed, the faster you repay, the higher the annual cost. Source: UK RBF provider funding page
Is it a loan?
Some providers structure it as a purchase of future revenue rather than a loan (example terms). Either way, you are contractually bound to pay. Source: UK card-acquirer revenue-advance T&Cs (Barclaycard Business Cash Advance, provided by Liberis; PDF)
Do I need to give a personal guarantee?
It depends on the provider. Some say no guarantee is needed; others ask shareholders with 25% or more to give one.
Is revenue-based finance regulated by the FCA?
Lending to limited companies and LLPs is outside the consumer credit perimeter whatever the amount (HM Treasury and FCA). Sole traders and small partnerships should check the agreement and the provider’s status. Introductions by a broker can be regulated above £25,000 too. Check any firm on the FCA Register. Source: gov.uk; Source
What happens if my revenue falls?
Your payments fall with it, and repayment takes longer. Some agreements still set a minimum monthly amount, such as “a minimum monthly amount of up to 3% of the total amount owed” at one UK provider. Check how your own agreement defines and tests the minimum. Source: UK card-acquirer revenue-advance T&Cs (Barclaycard Business Cash Advance, provided by Liberis; PDF)
Which businesses use it?
Mostly ecommerce, subscription and software businesses with steady revenue that will use the money for things that pay back quickly, such as marketing or stock.
Sources
Checked on 19 October 2026. Lender and provider pages are cited as evidence of what one firm publishes, not as recommendations.
- UK RBF provider blog: The Complete Guide to Revenue Based Finance (Uncapped; article undated)
- UK RBF provider funding page
- UK card-acquirer revenue-advance T&Cs (Barclaycard Business Cash Advance, provided by Liberis; PDF)
- RBF provider serving UK businesses (Wayflyer), comparison page
- gov.uk: HM Treasury and FCA Regulatory Perimeter Meeting, March 2025 (published 11 Apr 2025)
- UK Finance: IF/ABL member directory (specialist bank entry)