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daveb1867
01-23-2015, 02:54 PM
I am trying to get a more in depth understanding of revenue based loans. These are the small business loans that require the daily payments. What are lenders for this type of loan looking for?

nealrm
01-23-2015, 04:13 PM
I worked for a venture capital firm that did those a long time ago. Payments for the companies service went to the venture capital firm first and then the excess went to the company. I suspect that you will need to look outside of banks and other typical lenders. But I can't help you much beyond that.

NorthStar
01-29-2015, 12:42 PM
I am trying to get a more in depth understanding of revenue based loans. These are the small business loans that require the daily payments. What are lenders for this type of loan looking for?

I am a Broker that owns an Funding Company in NY and we offer many different business financing options including advances such at the ones with daily payments. These are not true interest rate loans but rather factor rates whereby you are charged the cost of the money borrowed. There are many different loan products out there, but typically these types of loans are provided to business owners based on their average monthly deposits or credit card batches (depending on who is providing the funding).

Finding the right business financing can be a tedious task especially if you are not educated on how these types of loans work. PLEASE BE VERY CAREFUL WHO YOU DEAL WITH IF YOU ARE WORKING WITH A BROKER FOR FUNDING, THERE ARE MANY UN-HONEST "BROKERS" OUT THERE AND IF YOU DON'T READ THE SMALL FINE PRINT, YOU MAY BE WASTING YOUR MONEY.

Good Luck

daveb1867
01-30-2015, 11:56 AM
I am a Broker that owns an Funding Company in NY and we offer many different business financing options including advances such at the ones with daily payments. These are not true interest rate loans but rather factor rates whereby you are charged the cost of the money borrowed. There are many different loan products out there, but typically these types of loans are provided to business owners based on their average monthly deposits or credit card batches (depending on who is providing the funding).

Finding the right business financing can be a tedious task especially if you are not educated on how these types of loans work. PLEASE BE VERY CAREFUL WHO YOU DEAL WITH IF YOU ARE WORKING WITH A BROKER FOR FUNDING, THERE ARE MANY UN-HONEST "BROKERS" OUT THERE AND IF YOU DON'T READ THE SMALL FINE PRINT, YOU MAY BE WASTING YOUR MONEY.

Good Luck

any particular companies you recommend? and what is their process like? documentation asked for? speed of process? also the industries that they work with?

donald12
03-23-2015, 04:51 AM
It is more expensive than the bank loans. But you should remeber that, if you will have a loan you should be targeting the loan that you can contain upon paying it.

Small Business Loans
04-18-2015, 08:11 PM
I am trying to get a more in depth understanding of revenue based loans. These are the small business loans that require the daily payments. What are lenders for this type of loan looking for?

Each funder may have their own "secret sauce" in terms of exactly what their qualification criteria are, but in general you can probably expect that a certain minimum level of annual revenue or "volume of cash flow" would be required of you, and that you would be expected to have been in business already for a certain minimum time period such as a year or two. Your business bank statements may be the most important factor in terms of what they look at.

2for1Creditlines
04-23-2015, 01:45 PM
I am trying to get a more in depth understanding of revenue based loans. These are the small business loans that require the daily payments. What are lenders for this type of loan looking for?


These loans are based primarily on your monthly sales, plus a number of other factors. Unlike traditional bank loans, they require much less paperwork, and can move very quickly from application to
actual funding, usually in about 72 hours, but I've seen others as fast as 24 -48 hours if the financial numbers work well, the industry type is right, and the merchant gets his paperwork back quickly.
Good credit is not required (min. credit score is 500), nor is collateral, or a down payment usually, so this is basically unsecured funding. The flips side is that the price for this speed and accessibility
is higher than a bank loan.


What these revenue based funders tend to look for are:


-Physical brick and mortar location
-At least $150,000 in annual sales (some go for less but they usually don't make you a huge priority)
-Credit score of 500+ or better
-Online businesses and home based businesses are okay if there is specific business account
kept separate from the owner's personal account, and sales are consistent.

-A positive monthly ending balance
-Not too many NSF's in the month (non sufficient funds)
...important because if they are repaid daily, and the account is always negative, they won't be able to
collect their debits
-A minimum of 10 to 20 transactions a month (1 or 2 large monthly payments scare them).

This criteria and a few other things will determine what you qualify for; you can typically expect to receive
30% - 90% of your monthly sales from my experience, and many times (at least with us), you will get an
answer/approval the same day or within 24 hours.


There are lenders who can provide hybrid funding models, where you can receive funds on sales revenue and also receive
additional funds if you actually happen to have collateral, in the form of heavy equipment, commercial properties
or residential apartments with 5 units or more. This can give the advantage of more money than what you would normally
qualify for, and possibly at a lower rate.

There are also lenders who can fund against future revenue owed (future receivables), and signed contracts for revenue
promised. Some take it a step further and not only look to fund but is some cases partner with the business to provide
business services like advertising and consulting, at no cost, to help drive growth (Most of those lenders are part of our investor network).

Hope this is helpful.

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guess84
05-29-2015, 08:54 PM
I purchased one of these. a couple months ago. I own a retail shop in Boston. I made the mistake of apply through a broker who shopped me around. best rate I got from him was 132k payback on a 100k loan over 12 months. I said screw that. I asked around and a freind of mine from a business down the street advised me that I really want to go to a Direct Lender.

bgallegos
06-03-2015, 01:16 PM
I know DealStruck and Merchant Cash and Capital offer these kinds of loans online, with pretty quick application processes (I think MCC even offers instant approval). You'd need to read their websites for detailed information regarding their requirements.

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CardSSmile
06-07-2015, 06:22 PM
"It is more expensive than the bank loans. But you should remeber that, if you will have a loan you should be targeting the loan that you can contain upon paying it."

even if they are more expensive sometimes its the only choice for small bussineses..

TonyPayat
06-10-2015, 08:28 PM
It really depends on the loan company and the type of loan you get.

For small business owners that do a lot of sales through debit / credit cards, a merchant cash advance that takes a percentage of your daily (or weekly) of your payment card receivables. This is a good option for small business owners, since the amount you pay to the loan company will fluctuate with your sales. On a slow day with not many sales, you only pay a little bit. On a high-volume day with lots of sales, you pay more.

Then theres the standard ACH loan, where the loan company will automatically withdraw a certain amount from your bank account on specific dates. This could be a good option if you're confident in your sales volume, and this type of loan can be paid off faster.

There are also "hybrid" loans, which combine the above repayment options.

Your only concern with these types of loans should be whether you can afford the loan. Are you taking out a loan against a sinking ship? IMO its better to cut your losses and try to start over, than sink further into debt.

hnavia
08-19-2015, 12:29 PM
I know it's an old thread, but to add and summarize on what everyone's said, you should expect to be required a monthly sales minimum target (~$15,000), a minimum of about 4 months in business, no minimum credit score for some (depending on amount), and funding between $10,000 to a million $. If everything looks good, you could get funding 5-15 days. <removed>