What Is RevenueBased Financing?
RevenueBased Financing (RBF) is a form of capital that lets businesses raise money in exchange for a percentage of future revenue. Instead of a fixed repayment schedule, the lender receives a cut of the companys topline sales until a preagreed total repayment (the cap) is met. This model is popular with SaaS firms, subscription services, and other highgrowth businesses that have predictable recurring revenue streams.
Why Use RBF?
- Flexibility: Payments rise and fall with revenue, protecting cash flow during slow periods.
- No dilution: Owners keep 100% equity, unlike venture capital.
- Speed: Funding can be secured in weeks rather than months.
- Alignment of interests: Lender benefits when your business grows.
Because RBF terms are tied to revenue, calculating a realistic bid is essential for both the borrower and the lender.
How the RBF Bid Calculator Works
The calculator takes four core inputs and produces three key outputs:
| Input | Description |
|---|---|
| Funding Amount (Principal) | The cash you want to receive today. |
| Revenue Share (%) | Portion of monthly revenue paid to the investor. |
| Projected Monthly Revenue | Estimated recurring revenue for each future month. |
| Cap Multiplier | Factor applied to the principal to determine total repayment (e.g., 1.5 means 150% of principal). |
From these inputs the calculator derives:
| Output | What It Shows |
|---|---|
| Total Repayment Required | Principal Cap Multiplier. |
| Estimated Payoff Month | Month when cumulative revenue share equals total repayment. |
| Average Effective Cost of Capital | Annualized IRR based on cash outflow schedule. |
StepbyStep Guide to Using the Calculator
1. Gather Your Data
Collect the most recent monthly recurring revenue (MRR) and create a realistic forecast for the next 1224 months. Consider seasonality, churn, and any planned growth initiatives.
2. Choose a Reasonable Revenue Share
Typical RBF deals range from 2% to 10% of monthly revenue. Higher shares accelerate repayment but increase cashflow pressure.
3. Set the Cap Multiplier
Common caps sit between 1.3 and 2.0. A 1.5 cap means you will repay 150% of the funded amount.
4. Input the Numbers
Enter the principal, share percentage, and monthly revenue forecast into the calculator. The tool will compute the cumulative payments monthbymonth.
5. Review the Payoff Timeline
If the projected payoff occurs earlier than anticipated, you might negotiate a lower share or a higher cap. If it stretches far beyond your growth horizon, consider reducing the share or improving revenue forecasts.
Funding Amount: $200,000
Revenue Share: 5%
Monthly Revenue Forecast (first 6 months): $40k, $45k, $50k, $55k, $60k, $65k
Cap Multiplier: 1.6 (total repayment = $320,000)
Result: Cumulative payments reach $320k in month 10, giving an effective annual cost of ~21% IRR.
6. Sensitivity Analysis
Run the calculator with bestcase, basecase, and worstcase revenue scenarios. This helps you understand how fluctuations in growth impact the repayment schedule.
Frequently Asked Questions
Is RBF a loan?
It is a financing contract, not a traditional loan. There is no fixed monthly payment; instead, the payment is a variable percentage of revenue.
Can I use RBF alongside equity financing?
Yes. Because RBF does not dilute ownership, many founders combine it with a modest equity round to preserve runway while keeping control.
What happens if my revenue drops sharply?
The monthly payment will shrink proportionally, but the total amount owed remains unchanged. Most agreements include a minimum payment clause to prevent indefinite extension.
How is the IRR calculated?
The calculator treats the funding amount as a cash inflow at time zero and each months revenueshare payment as an outflow. It then solves for the discount rate that sets the net present value (NPV) to zero.
Do I need an accountant to use the calculator?
While a basic forecast can be entered by anyone with access to recent financial statements, an accountant can help refine revenue projections and interpret the resulting IRR.
