Securing Funding For A Business

Securing funding for a business can be a daunting process, especially if you have poor credit or a lack of credit history. However, there are options available to entrepreneurs who need funding based on their revenue, rather than their credit score.

One such option is revenue-based financing. Revenue-based financing is a funding model that provides businesses with financing based on their current revenue. With this model, investors provide funding in exchange for a percentage of the business’s future revenue. This funding model doesn't require any collateral or equity sharing, making it an attractive option for startups and small businesses who don't want to give up control of their businesses or assets.

Revenue-based financing companies typically assess applicants based on their monthly recurring revenue. Applicants with a strong revenue history are more likely to qualify for funding, while those with a lower monthly recurring revenue may be eligible for a smaller amount of funding or may be asked to provide additional documentation.

Another option for business funding based on revenue is merchant cash advances. In this model, a lender provides funding to a business in exchange for a percentage of its future sales. The lender takes a portion of the daily sales until the loan plus fees are paid back in full.

Additionally, you can also consider invoice financing, which is growing in popularity. This funding option allows businesses to borrow against unpaid invoices, giving them quick access to cash while their invoices are being processed. Invoicing financing companies typically approve applicants based on the creditworthiness of their clients, rather than their own credit history, making it a viable option for those with poor credit.

In conclusion, funding based on revenue can be a good alternative to traditional financing models that rely heavily on credit scores. It's important to evaluate your options carefully and consider which funding model will work best for your business needs. With careful preparation and research, you can secure the funding your business needs to grow and thrive.