Where this product fits
Revenue-based financing — the merchant cash advance — is rung 4 of our cost ladder: the fastest money on the panel and the most expensive. It is underwritten on your deposits, not your credit score or collateral, which is exactly why it is both supremely accessible and premium-priced. Our house rule is written down: we never default to revenue-based capital because it's the easy yes. Every file starts at the cheapest lane it could qualify for — conventional and SBA, then equipment, then credit lines and factoring — and only lands here when the file or the deadline forces it. When rung 4 genuinely is your fit, our job is to make it cost as little as possible: the lowest factor rate the panel will price, sized so the remittance never strangles the business.
How it works
An advance is a purchase of future receivables, not a loan. You receive a lump sum and remit a fixed total — the advance times a factor rate — through daily or weekly debits. Pricing is expressed as a factor rate, typically 1.10 to 1.50: a $50,000 advance at a 1.30 factor repays a fixed $65,000. Holdback — the share of revenue remitted — commonly runs 5% to 20% of deposits. Because the payback is a fixed multiple rather than an interest rate, the effective annualized cost is high — routinely above what any term product would charge — which is why we treat it as a speed tool, not a financing strategy.
Typical terms
- Amounts: roughly $5,000 to $500,000, sized by an advance multiple of about 0.75x to 1.5x average monthly gross deposits.
- Speed: commonly 24 to 72 hours from complete file to funding.
- Qualifying: most funders want roughly $10,000 to $15,000+ in monthly gross deposits and read your bank statements directly — average daily balance, deposit velocity, NSF history. Credit score matters far less than cash flow.
- Watch for: stacking (multiple advances debiting at once — cumulative holdback above ~24% of revenue is the danger zone), origination and ACH fees, and factor-rate upsells. Several states (California, New York, Utah, Virginia, Connecticut) now require TILA-style cost disclosures on commercial financing — read them; they exist to make this product comparable.
When it's the right call
High-ROI, short-window situations: the discounted inventory buy, the emergency repair with revenue stopped, the contract that needs upfront payroll. If the gross margin on the opportunity clearly outruns the factor cost and the timeline rules out the upper rungs, an advance is a legitimate tool. If it doesn't, we'll say so.
Already holding an offer?
Bring it. Two ways we beat it: we re-route the file up the ladder to a cheaper lane — or, if this is genuinely your fit, we beat the offer on a lower payment and a lower total payback. If we can't, we pay you $50. Put us to the test.