Revenue-Based Financing

Revenue-based financing (RBF) is an alternative financing solution for businesses in Singapore to access funding. The financing amount through revenue-based financing is determined by the business’ past and projected revenue, and is up to 3x of the revenue. This approach simplifies the application process, requiring minimal documentation compared to traditional financing.

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Why Revenue-Based Financing?

No Equity Dilution

Businesses can access funding without giving up ownership equity, meaning existing shareholders can maintain control of the company.

Collateral Not Required

Businesses in Singapore that do not have any collateral or receivables are typically unable to access loan facilities. Revenue-based Financing allows these businesses to pledge their future revenue in exchange for loan facilities.

Speed & Flexibility

We use alternative data to assess your loan application and often results in a simpler and faster application process.

Fast Approval

Approval can be obtained within 1 working day.

Minimal Documents

Minimum documents are required - your bank statements and NRIC.

Convenient Giro Payments
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Why Should You Consider Revenue-Based Financing?

Revenue-based financing (RBF) proves optimal for specific business scenarios in Singapore, including:

  • Suitability for Your Industry: RBF is particularly well-suited for industries such as F&B and retail, where sales revenue is a clear indicator of business performance. The model aligns well with the cash flow patterns and seasonal fluctuations typical in these sectors.
  • Cash Flow Challenges: Existing businesses encountering cash flow issues but maintaining substantial revenue can leverage this financing option.
  • Credit History: Suited for borrowers facing challenges in qualifying for traditional financing due to less-than-ideal personal credit.

Revenue-based financing does not require collateral, or strong personal financials to be eligible. The financing is assessed based on your past and projected sales transactions instead.

Merchant Cash Advance (MCA)

Similarly, a Merchant Cash Advance (MCA) provides businesses with swift access to funding, primarily through the advance of cash against future sales. MCAs are particularly suitable for small businesses with regular card transactions. Repayment aligns with the business's sales volume, integrating seamlessly with the cash flow. The emphasis is on sales revenue rather than traditional credit metrics, making MCAs an attractive option for businesses looking for flexible repayment terms.

Overall, both present innovative funding solutions for businesses in Singapore, focusing on sales revenue thereby offering a more accessible and adaptable financial resource for growing enterprises.

Typical Industries of Revenue-Based Financing Users

Food & Beverages

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Retail

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E-commerce

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Online Businesses

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Why Revenue Financing?

Speed & Flexibility

RBF financers use alternative data to assess your loan application, and often have a simpler and faster application process.

Fast Approval & Minimum Docs

Approval can be obtained within 1 working day and with minimum documents are required you will just need submit your Credit Bureau Report and NRIC.

Collateral Not Required

RBF allows Businesses that dont have any collaterals or receivables to pledge their future revenue in exchange for loan facilities.

No Equity Dilution

Businesses are able to access capital without giving up ownership equity. So, existing shareholders can maintain control of the company

How does it work?

Take a look how to apply our product financing. It's so simple and easy to apply

Investment agreement and disbursement

The agreement will specify the amount of financing available, the percentage of future revenues that the investor will receive, and any other terms and conditions of the investment.

Revenue sharing and repayment

During the repayment period, the company will share a percentage of its revenues with the investor, typically between 2-10% depending on the agreement terms.

Loan servicing and closure

During the repayment period, the investor and the company will work together to track revenues, calculate payments, and manage the loan account. Once the loan is fully repaid, the investor will receive the agreed-upon return on their investment, and the investment agreement will be closed.

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Polaris

Learn how Polaris - a cloud based app can help your business access reverse to provide significant and strategic cashflow for you.

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FAQs

How do I know if my business qualifies for Revenue-based Financing?

Consider factors such as the business's annual revenue, profitability, growth potential, and management team when evaluating whether to provide funding. It's important to carefully review and understand the specific requirements of each RBF provider before applying to ensure that your business meets the necessary criteria.

What documents are required for Revenue-based Financing?

- Financial statements: This includes income statements, balance sheets, and cash flow statements. RBF providers will typically review these documents to evaluate the financial health of the business.
- Tax returns: RBF providers may require the business's most recent tax returns, including both personal and business tax returns.
- Bank statements: The RBF provider may request several months of bank statements to verify the business's revenue and cash flow.
- Business plan: A detailed business plan can help demonstrate the potential for growth and success of the business, which can be important for RBF providers evaluating funding requests.
- Legal documents: This may include business licenses, incorporation documents, and any contracts or leases that the business has entered into.

How long is the process from application to disbursement of loan?

The RBF process can take anywhere from a few weeks to several months.

What is the loan tenure typically?

The loan tenure for revenue-based financing (RBF) ranges from 12 to 60 months,

What are the charges and fees involved for Revenue-based Financing?

Origination fees typically range from 2% to 6% of the total funding amount, while interest rates on RBF can range from 10% to 30% and are often expressed as a multiple of the funding amount.

How do I make the monthly repayments?

Monthly repayments for revenue-based financing (RBF) are typically made as a percentage of the business's monthly revenue, which is agreed upon in advance between the RBF provider and the business.

Resources

Press & media, financing guides and more

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Articles
Guide to Understanding Financial Planning for Business Success
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Articles
GB Helios CONNECT: F&B
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Articles
Guide to Business Credit Scores in Singapore
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