#revenue-based-financing
Revenue Based Financing
Revenue-based financing options for growing businesses
Revenue-Based Financing vs. Merchant Cash Advance: What You're Really Paying and How to Keep the Books Clean
A $50,000 advance at 1.30x costs $15,000 either way — but repaid over 20 months at 8% of revenue it annualizes near 18%, while the same fee via $400 daily debits over 7 months behaves like 80%+ APR. Learn how to convert factor rates to comparable APRs, when RBF vs. MCA fits, and the liability and processor-reconciliation entries that keep your books honest.
A Lender You've Never Heard Of Just Raised $525 Million. Here's What It Means for Your Next "No" From a Bank
Forward Financing closed $525 million in new funding as alternative lenders grew from about 29% of small business lending in 2023 to roughly 41% today. What that shift means for borrowers banks reject, how to convert a factor rate to an effective APR (a 1.35 factor over 9 months is roughly 46%), and a five-point checklist to run before signing any non-bank financing offer.
FASB Settles How to Account for Factored Receivables Billed Before the Work Is Done: ASU 2025-12 Issue 20 and ASC 860
FASB's ASU 2025-12 (Issue 20) clarifies that receivables recognized before performance is complete — annual SaaS billed upfront, retainers, construction progress billings — fall under ASC 860's transfer rules when sold or factored, not ASC 470 debt guidance by default. The fix takes effect for annual periods beginning after December 15, 2026, with issue-by-issue early adoption, and sale treatment still requires passing the true-sale test.
Revenue-Based Financing: How to Trade a Slice of Future Sales for Growth Capital Without Giving Up Equity
Revenue-based financing repays a lender 2-8% of monthly revenue until a 1.2x-3x cap is reached, typically costing 20-50% effective APR versus 40-300%+ for merchant cash advances, with no equity or collateral required.
Are Merchant Cash Advances Worth It? A Beancount Perspective
Merchant cash advances promise fast funding but often hide triple-digit APRs. Learn how to model the true cost, spot warning signs, and use Beancount to find smarter financing alternatives.