Contract types:
- Revenue/Receivables Purchase Agreement
- Unsecured loan with revenue-based repayments
Usual terms:
- APR: 12% – 30% (varies based on revenue trajectory)
- Period: 6 – 24 months
- Amount: 20k – 5M+ (€ or £); usually 15 to 60% of the annual revenue
- Repayments: It can be flexible (notably for Ecommerce businesses) or fixed (if the revenue is recurring)
- Collaterals: Usually no collaterals, the purchased revenue can be considered as a soft collateral (asset being “purchased” under a Revenue Purchase Agreement) but legally this is not a collateral
Usual eligibility criteria:
- Monthly revenue > 10k (€ or £)
- 6+ months of consistent revenue
- Healthy debt and LTV/CAC ratios, long-enough runway or good growth
Important note: RBF providers often uses a discount rate, not an interest rate. The discount rate determines the repayment cap (e.g., advance of €100k repaid as €110k = 10% discount) when the APR includes all fees and costs at the end of the facility repayments.