Revenue Based
Business Loans

Immediate Working Capital Based off Revenues

If you find qualifying for traditional business loans difficult, it may be time to consider a revenue based business loan.

Shield Funding has been providing revenue based business loans for more than a decade and is willing to take a chance on the growth of your business. With a solid plan and consistent revenue, a revenue-based business loan help take your business to the next level.

The process for securing working capital based on your existing business’ revenue is fast and easy, and even if you have bad credit you can be approved. Get started by applying online and see how much money is available to secure for your business.

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What Do I Need to Qualify?

Below is a list of the requirements to get approved for business funding with our most basic program.

  • At Least 3 Months in Business
  • 530 Min. Credit Score
  • $10,000 Min. Monthly Revenue
  • How Do I Apply?

    Applying has never been easier. You can either call our toll free number 24 hours 7 days a week at


    Submit your online application by clicking apply below and entering a few basic details about your business.

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    What is a Revenue-Based Business Loan?

    A revenue based business loan provides the capital needed to grow your business. This capital comes in the form of a private business loan and comes from a lender who believes in what you’re doing.

    Lenders expect these loans to be used to develop new products, expand your sales force, or venture into new markets. They’re not bound by the same regulations as a bank loan. Approvals and funding can be obtained in a relatively short period—much shorter than the months it may take a bank to reach a decision.

    Revenue based business loans are all about your earnings—repayment terms are calculated as a percentage of your revenue. When reviewing your loan application, the lender focuses primarily on your revenue stream and your business plan. Lenders look for the potential to increase your revenue. Ultimately, the faster your business grows, the faster you pay off the loan.

    So it’s key to have a plan for growing your revenue. You’ll need to present that plan convincingly to the lender.

    Another factor lenders consider is your gross margin. Gross margin is your revenue minus the cost of goods sold divided by revenue. Lenders offering revenue-based business loans require a minimum 50% gross margin. This threshold helps guarantee that your revenue stream will be sufficient to support your business expenses as well as the monthly loan payment.

    Your credit score and past credit history play little to no role in the approval process. Borrowers with growing monthly revenue can still qualify for a loan even if they haven’t been in business for very long or have had financial problems in the past. Fortunately for borrowers, revenue based loans rarely have any collateral requirements and are another form of unsecured business loans.

    Borrowers are also able to obtain higher financing amounts with revenue based loans than with traditional loans. Revenue based business lenders are willing to take on more risk, because the repayment is tied to monthly revenue. On the flip side, the borrower pays more interest on these loans because of the higher risk.

    Monthly repayment amounts range from 2% to 8% of monthly revenue. Usually, the amount comes in around 5%. But with higher interest, the ultimate cost of debt over the full loan term will be higher than a traditional business loan. You can expect to pay approximately 1.35 times the amount borrowed over the term of the loan depending on the business profile as well as credit history.

    Let’s look at some of the most important pros and cons of business loans based on revenue, so you can make an informed decision.

    The Pros of Revenue Based Business Loans

    One positive aspect of revenue based business loans is the larger amount availability. Linking loan payments to revenue allows lenders to provide more cash than banks feel comfortable loaning. Although less than venture capital offers, they provide more financing than other collateral-based loans. In the end, these loans give businesses the help they need to ramp up their growth.

    In exchange for financing, venture capitalists take an equity stake and usually wield some control over the business. With a business loan based on your business revenue you won’t have to yield to either of these demands. This loan option allows you to maintain full control of the business you built.

    Your monthly payment fluctuates with your monthly revenue. Lenders calculate your repayment amount as a percentage of revenue. Slow months or seasonal downturns won’t cause the stress of struggling to make your loan payment that be under using a regular bank loan.

    The faster you grow, the faster you repay the principal balance. And, with a faster payback, the cumulative interest will be lower, thereby lowering the overall cost of the debt. This incentive encourages business owners to focus their effort into more growth—something traditional bank loans never offer.

    These advantages are great, but they don’t tell the whole story. There are a few other factors to consider.

    The Cons of Revenue Based Business Loans

    Higher risk to the lender means higher rates for you. Some rates on revenue-based business loans can reach up to 80%. It might seem like you’ll never pay off the loan because your monthly payment goes primarily toward interest. Over the term of the loan, the cost of debt can be significantly more than traditional loan options.

    Since your payment is tied to monthly revenue, your loan term fluctuates. The faster you grow, the faster you pay off the loan—but remember that the opposite is also true.

    If your growth is slower than expected, the number of months needed to pay off the loan will grow. This results in paying more interest over the term of the loan. Sometimes lower growth is outside of your control, but you need to be aware of how this affects the cost of your debt.

    Finally, you’re giving up a portion of your revenue each month, which can be inconvenient. More cash going toward debt means less available to take advantage of new opportunities. Less available cash may also impact your ability to address the unexpected. Not being able to afford repairs may hinder growth. It’s important to make contingency plans for these situations when drafting your business plan.

    Now that you know the pros and cons, let’s consider a few more cases to help you decide if a revenue-based business loan will help your business grow.

    Is a Revenue Based Business Loan Right for You?

    Borrowers who have a strong revenue growth plan are ideal for revenue-based business loans. The loan proceeds can be immediately directed toward growth projects—and that’s what lenders like to see when they’re betting on your growth.

    New product development, increasing your sales force, and new sales initiatives are excellent uses for a revenue-based loan. These efforts directly affect revenue growth. As they pay off, you pay down your loan faster, which lowers your ultimate borrowing cost.

    If you don’t have collateral or are troubled by past credit problems, but have strong revenue growth, you may be the perfect borrower for this type of loan. These lenders care more about where your business is growing than where you came from. A solid business plan will do more to support your case for a revenue-based business loan than a lengthy review of your credit history that traditional banks are tied to.

    Seasonal revenue streams cause trouble for some business. They struggle to make expense payments during down months. Adding the stress of a set loan payment won’t do much to help. With a revenue-based business loan, your payment will fluctuate along with your revenue. This type of repayment plan is designed to keep your expenses in line with your cash flows.

    Need money fast to take advantage of a growth opportunity? Niche lenders in this area don’t drag out your wait for an approval. You can get approved and have the cash in hand to start growing their business in several days or a few weeks.

    However, it’s important to note that you might not be the best candidate for this type of loan if you aren’t 100% sure that your business will be experiencing a solid amount of growth. This isn’t a loan that will keep you afloat—if you’re struggling, the higher interest rates could be be problematic.

    If you anticipate growth, though, revenue based business loans will help you make it happen!

    Does this sound like a good fit for your business? Give us a call to chat about our revenue based business funding options and other possibilities for funding your business!

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