The hardest thing about a fixed loan payment is that it does not care how your month went. A strong month and a terrible month cost the same. For a business whose sales move around, whether because of the seasons, project timing or growth, that can turn a perfectly reasonable loan into a source of stress. Revenue based financing takes a different approach: you repay through a share of your revenue, so what you pay moves with what you earn. fundivi offers revenue based financing from $50K to $5M, with decisions typically the same day, and this guide explains how it works, how the share is set, who it fits, and how it differs from the products people confuse it with.
If your business has been open for 6 months or more, brings in $30K or more in monthly revenue, and the owner has a personal credit score of 550 or higher, you can see what you qualify for in about 2 minutes.
How It Works
You receive a lump sum up front. You then repay it by paying a set percentage of your revenue over time, until the agreed total has been repaid. When sales are strong, that percentage produces a larger payment, and the balance falls faster. When sales are slow, the payment shrinks, and you are not squeezed.
The trade is that the end date is not fixed. In a strong stretch you finish early. In a slow stretch it takes longer. Agreements often include terms that describe the expected timeline and any limits, so read yours closely to understand what happens at either extreme.
A simple illustration helps. Suppose your agreement collects a set share of monthly sales. In a month with $100,000 in revenue, the payment might be a certain amount. In a month with $50,000 in revenue, the payment would be roughly half that. A fixed loan payment would be the same in both months, which makes the slow month much harder.
Who It Fits Best
Revenue based financing is a natural match for businesses whose income is uneven but fundamentally healthy.
Seasonal businesses. Landscapers, pool companies, tourist town restaurants and retailers with a holiday peak earn most of their income in a few months. Payments that track sales ease the slow months.
Growing businesses. A company that is scaling quickly may find that a payment sized for today's revenue feels small next year. With a share based approach, repayment rises with the business, and the share stays proportionate.
Project based businesses. Agencies, contractors and consultancies whose income arrives in lumps can benefit from a structure that adjusts to the lumps.
Businesses recovering from a slow patch. A company that has had a rough quarter but is rebuilding may prefer a payment that starts lighter if sales have not yet recovered.
How the Revenue Share Is Determined
The percentage is not arbitrary. It is typically set so that, at your normal level of revenue, the payment is manageable and the advance is repaid within the expected period. A higher share repays faster and costs less in total time but takes a bigger bite of each month. A lower share is gentler but takes longer.
fundivi's underwriting engine reads your business bank activity to understand your revenue patterns. It looks at how much comes in, how steadily, and how it varies through the year. The consistency of sales matters as much as the total. A business with steady revenue of $60K a month is generally easier to evaluate than one with a few huge months and many empty ones, even if the annual total is the same.
The baseline requirements are 6 months in business, an active business checking account, $30K or more in monthly revenue and a personal FICO score of 550 or higher.
Revenue Based Financing Versus a Fixed Term Loan
A term loan has a set payment and a set end date. That predictability is valuable for budgeting, and in a stable business it is hard to beat. The cost is rigidity. If sales dip, the payment does not.
Revenue based financing gives up the fixed end date in exchange for flexibility. It is generally better when your sales are uneven or growing and worse when your revenue is rock steady and you simply want a known schedule. A useful test: if your slowest month is less than half your best month, a share based structure deserves a close look.
The cost comparison deserves care too. Because the repayment period can vary, the effective cost depends on how quickly your revenue allows you to repay. A fast repayment can raise the effective annual cost, while a slow one lowers it. Compare total dollars, not just a rate, and use the cost calculator to model different scenarios.
Revenue Based Financing Versus a Merchant Cash Advance
These are cousins, and owners often confuse them. Both link repayment to sales, and both can be decided quickly. The differences are in the typical structure and scale. A merchant cash advance usually draws repayment through frequent collections, often daily or weekly, from sales. It is common among businesses with steady daily revenue and is available at fundivi from $10K to $2M. Revenue based financing is generally structured around a share of monthly revenue and runs from $50K to $5M, which makes it more natural for larger needs and businesses whose income is measured over months.
If your sales arrive daily and you want a smaller amount quickly, an advance may fit. If your revenue swings month to month and you want a larger amount with repayment that follows the swings, revenue based financing may fit better. A short conversation can clarify which is right.
Other Comparisons
Against working capital: working capital is a lump sum repaid on a set schedule and is decided from $10K to $2M. If you want predictability, it may suit you. If you want repayment that flexes, consider the share based approach.
Against a line of credit: a line is revolving and you pay interest only on what you use. It is flexible in a different way: you control when you borrow. Revenue based financing flexes the payment instead of the borrowing.
Common Reasons an Application Is Declined
The most common reasons relate to revenue. If revenue is too low or too erratic to support the share, or the trend is falling and it is unclear when it will recover, the review becomes difficult. Existing obligations that already consume a large part of revenue also limit room. Frequent overdrafts suggest strain. And incomplete or inconsistent documents delay decisions.
If you are declined, ask for the reason. A smaller amount, additional months of statements or a different product can change the answer.
Modeling Scenarios Before You Apply
A good habit before signing any agreement is to test it against several futures, not only the one you hope for. Take your last twelve months of revenue and imagine three scenarios.
A normal year, where revenue follows the pattern of the past twelve months. How long would repayment take and what would you pay each month?
A strong year, where revenue grows by twenty percent. You would repay faster, but make sure the larger payments still leave room for your costs.
A weak year, where revenue falls by twenty percent. The payments would shrink, which is the point, but the repayment period would stretch. Make sure you are comfortable with the longer timeline and that your agreement does not impose penalties for it.
If all three scenarios work, you are likely looking at a sound fit. If one of them makes you uneasy, adjust the amount.
A Worked Example
A pool installation company earns most of its revenue between April and September. Monthly revenue runs from about $35,000 in winter to $140,000 in summer. The owner wants $150,000 to buy equipment and hire two crews before the season starts. A fixed payment sized for the busy season would be painful in January, and a payment sized for January would barely dent the balance.
With revenue based financing, the share of revenue produces small payments in winter and larger ones in summer, which matches the company's own rhythm. The owner models three scenarios, a normal year, a strong year and a wet, weak year, and finds that the repayment timeline in the weak case is longer but still acceptable. The equipment itself could also be financed on its own through equipment financing, leaving the revenue based advance for hiring and ramp up costs.
A very different business shows the limits. A subscription company with perfectly steady revenue every month and a clear plan might do better with a term loan and its predictable payment, since it has no swings to flex around.
Getting Started
Gather your recent business bank statements, basic business and ownership information, and a sense of your sales pattern through the year. The how it works page explains each stage. If you are not sure which product suits you, the funding product matcher can point you toward a likely fit, or you can book a consultation. To learn about the company, visit the about page, and for further guides see our resources. fundivi is a hybrid lender that matches you first against its own capital and can bring in vetted partners when another structure fits.
Questions to Ask Before You Sign
Because the structure is flexible, the details deserve a careful look. Ask what percentage of revenue is collected and what counts as revenue for that purpose. Ask how often collections occur and how they are taken. Ask for the total amount you will repay, and whether that total is fixed or can change with the timeline. Ask about any minimum payment, any maximum repayment period and what happens if sales fall sharply.
Ask too about fees, including any origination charges and whether there is a discount or a penalty for repaying early. And ask whether the provider reports to business credit bureaus, whether a personal guarantee applies, and who the actual provider is.
It also pays to think about reporting. If your revenue includes deposits that are not really sales, such as transfers between your own accounts or a loan from a family member, make sure they are handled correctly so your share is calculated on true revenue. A clean bookkeeping process makes this simple.
If any answer is unclear, ask again and get it in writing. A good agreement is one you can explain to a colleague in two sentences. If you cannot, you are not ready to sign.
Renewing and Growing Over Time
Many owners return for a second round once the first is mostly repaid. A clean repayment record shows how your sales behave under a share based structure, which makes the next request easier to evaluate. If your revenue has grown, a larger amount may be reasonable, and the share can be set to match your new level of sales.
Before renewing, compare the total cost of the new offer with the cost of simply finishing the current one, and ask whether the balance remaining is folded into the new amount. A renewal makes sense when it funds something productive that your business could not otherwise afford. It makes less sense when it only extends a cycle of borrowing. As always, the question to ask is what the money will earn.
Frequently Asked Questions
How does repayment adjust with sales?
You pay a share of revenue, so higher sales mean larger payments and lower sales mean smaller ones. Your agreement describes the exact terms.
How fast can I get a decision?
fundivi revenue based financing is typically decided the same business day, depending on how early you apply and how complete your file is. It is not guaranteed for every applicant.
How much can I get?
Revenue based financing at fundivi runs from $50K to $5M, based on your revenue and cash flow.
Is it the same as a merchant cash advance?
They are related, since both tie repayment to sales, but the structure and typical scale differ. Merchant cash advances at fundivi run from $10K to $2M.
What if my sales drop?
Payments shrink with revenue, though the repayment period may stretch. Review your agreement for any limits or terms on timing.
Can I use it with another fundivi product?
Often yes. Many owners combine a share based advance with equipment financing or a line of credit. Your total obligations are reviewed as part of the decision.
Next Steps
If your sales move around and a fixed payment worries you, revenue based financing may fit. Take the 2 minute application to see what your business qualifies for, with many decisions arriving the same day.
