What is revenue based lending? A lender funds your business based on your sales instead of your credit score or assets. You get an advance on your future receivables, there’s a fixed cost, and you pay it back through daily or weekly payments. No collateral, no personal guarantee in most cases.
How It Works in Practice
You apply. The lender looks at your bank statements and recent sales. If your business is generating consistent revenue they make you an offer. The advance amount, the fixed cost, what payments look like, the term length. You know what you’re agreeing to before anything is signed.
Once you accept the funds go into your account. Repayment starts and runs for the length of the term. Could be three months could be two years. Shorter terms mean higher payments but you’re done faster. Longer terms mean smaller payments spread out over more time.
At Canada Capital we can usually get back to you within 24 hours. Some deals fund the same day.
What Can You Use It For
Anything. No restrictions on how the money is used. Payroll during a tight month, inventory before a busy season, equipment that broke down, deposits on materials for a new contract, marketing, renovations.
A restaurant owner who needs $25,000 for a kitchen renovation isn’t going to wait six weeks for a bank to process their application. They need the work done now. A contractor who just signed a $150,000 job but needs to buy materials upfront can’t sit around waiting on a bank either. That’s who uses this.
What Is Revenue Based Lending vs a Traditional Loan
A traditional bank loan is based on your credit, your assets, your financial history, how long you’ve been in business. The bank takes weeks to review all of that and usually wants collateral or a personal guarantee on top of it.
Revenue based lending is based on your sales. Faster approval because there’s less to review. No collateral because your revenue backs the deal. No personal guarantee because the lender isn’t looking at your personal finances.
It costs more than a bank loan though. Banks charge less because they have collateral and personal guarantees reducing their risk. Revenue based lenders don’t have that so the pricing is higher. We wrote more about how the two compare here.
Who Qualifies for Revenue Based Lending in Canada
Small and medium sized businesses with consistent revenue. Restaurants, retail, e-commerce, trucking, contractors, salons, professional services. Most industries. Every province.
You don’t need perfect credit. You don’t need two years of operating history although it helps. You don’t need to own property. We’ve funded brand new businesses and businesses that have been running for over a decade. Businesses with great credit and businesses with credit that’s been through rough patches. If sales are coming in consistently we can usually work with you.
Explore Your Options
We offer revenue based lending through our revenue based financing program along with unsecured business loans, business lines of credit, and small business capital. Apply here and we’ll figure out what works for your business.