Revenue-based financing (RBF) is a flexible funding option tailored for seasonal businesses with fluctuating cash flow. Instead of fixed monthly payments, RBF adjusts repayments based on your sales - higher during peak seasons and lower during slower months. This helps businesses manage cash flow, stock inventory, and invest in growth without the rigid terms of traditional loans.
Key Benefits of RBF:
- Payment Flexibility: Pay a percentage of your revenue (5–20%) instead of fixed amounts.
- Fast Funding: Access funds within 24 hours.
- No Equity Loss: Retain full ownership of your business.
- Seasonal Adaptability: Payments align with sales, reducing strain during off-peak times.
Example:
A business receiving $50,000 in RBF and repaying 10% of monthly revenue would make larger payments during high-demand months and smaller ones during slower periods, ensuring financial stability while fueling growth.
Quick Overview:
| Feature | Details |
|---|---|
| Repayment Model | % of monthly revenue (5–20%) |
| Funding Speed | Within 24 hours |
| Repayment Period | 6–18 months |
| Eligibility | $3,000 minimum monthly revenue |
RBF is ideal for eCommerce sellers needing capital for inventory, marketing, or scaling operations ahead of busy seasons. Providers like Onramp Funds offer tailored solutions with transparent fees and seamless platform integration.
How to Start: Analyze your sales data, calculate funding needs, and connect with a provider to secure RBF that aligns with your seasonal business cycles.
Revenue-Based Financing Basics
Sales-Based Payment Structure
Revenue-Based Financing (RBF) adjusts your repayment to match your sales. Instead of fixed monthly payments, you pay a percentage of your actual revenue.
- December example: $100,000 in sales results in a $7,000 payment.
- July example: $40,000 in sales results in a $2,800 payment.
This approach ensures that payments align with your earnings.
"Payments align with sales - you pay when you earn." - Onramp Funds
Standard Terms and Fees
RBF agreements typically include the following elements:
| Component | Common Range | Details |
|---|---|---|
| Payment Percentage | 5–20% | Portion of your monthly revenue dedicated to repayment |
| Repayment Period | 6–18 months | Flexible timeline tied to your sales performance |
| Funding Speed | Within 24 hours | Time from approval to receiving funds |
These terms allow repayments to scale with your revenue, ensuring they reflect your business's actual performance.
The exact terms depend on factors like your sales history and overall business performance. Many RBF providers aim for full repayment within 18 months, though this can vary based on how your sales fluctuate.
For example, a seasonal eCommerce business obtained $50,000 in funding through Onramp Funds, agreeing to repay 10% of monthly revenue. This arrangement allowed the business to stock up on holiday inventory while keeping cash flow steady during slower months. During peak season, they made larger payments, which helped them repay the financing faster.
Key benefits of this payment model include:
- No fixed monthly payments.
- Automatic adjustments based on sales ups and downs.
- Less financial strain during slower periods.
- Payments that grow alongside your business.
This flexibility makes RBF especially useful for seasonal businesses needing funds for inventory or marketing before their busy season - without the rigid repayment schedules of traditional loans.
Advantages for Seasonal Businesses
Managing Off-Season Cash Flow
Revenue-based financing (RBF) offers a payment structure that adjusts based on your sales, making it a great fit for seasonal businesses. Unlike traditional loans with fixed monthly payments, RBF aligns payments with your actual revenue. For instance, a summer retailer facing slower winter months will see their payments decrease in line with reduced sales, helping them preserve cash for essential operations.
"Your payments sync with your sales, you'll never have to worry about your ability to repay during a slower month." – Onramp Funds
"Onramp has simplified cash flow by automating everything: simple, automated, set-it-and-forget-it payments."
This flexibility not only helps during off-peak times but also ensures businesses can quickly access funds for growth when needed.
Funding Growth Opportunities
RBF empowers seasonal businesses to prepare for peak periods by offering fast access to capital. According to Onramp Funds, their clients see an average of 30% revenue growth within 180 days of receiving funding.
The funding process is fast - usually under 24 hours - allowing businesses to act quickly on time-sensitive opportunities. This speed is critical for investments like:
| Growth Investment | Timing Before Peak Season | Benefit |
|---|---|---|
| Inventory Stocking | 2–3 months | Ensures enough stock for high demand |
| Marketing Campaigns | 4–6 weeks | Builds awareness before busy periods |
| Operational Scaling | 1–2 months | Prepares for increased workload |
With RBF, businesses can make these key investments without giving up ownership or control. The combination of fast funding and payments tied to sales creates a win-win for sustainable growth. In fact, 100% of Onramp customers report they would borrow again.
Qualification Requirements
Sales History and Volume
When evaluating eligibility, providers look at your revenue consistency. For seasonal sellers, they consider both your regular monthly earnings and seasonal peaks to assess potential.
| Evaluation Criteria | Requirement | Impact on Qualification |
|---|---|---|
| Monthly Average Revenue | Minimum of $3,000 | Key factor for qualification |
| Peak Season Performance | Historical records | Highlights revenue potential |
| Off-Season Revenue | Baseline activity | Proves business stability |
| Platform Sales Data | Connected accounts | Confirms revenue accuracy |
In addition to revenue, providers also examine your business structure to ensure it can sustain long-term operations.
Business Requirements
Seasonal sellers are eligible for revenue-based funding, which evaluates both sales patterns and business fundamentals to account for seasonal variations.
To qualify, your business must:
- Be legally registered in the United States.
- Operate on supported eCommerce platforms like Amazon, Shopify, or Walmart Marketplace.
- Have connected sales accounts for automated verification.
- Maintain consistent sales activity, even during off-peak times.
This type of funding does not require:
- A minimum time in business.
- Personal credit checks.
- Collateral.
- Fixed monthly revenue.
The process involves linking your eCommerce platform to the financing provider's system, enabling automated sales analysis. For seasonal sellers, providers such as Onramp Funds focus on your overall performance trends instead of just recent revenue. This method respects the ups and downs of seasonal businesses while ensuring responsible lending practices.
sbb-itb-d7b5115
Revenue-Based Financing: What Is It, and How Does It Work?
Selecting a Financing Provider
Once you're clear on the benefits and requirements of Revenue-Based Financing (RBF), the next step is finding a provider that aligns with your business's seasonal cash flow needs. Look for providers who understand the challenges of cyclical sales, offering flexibility during slower periods and support during busier times.
What to Look For
Here are some key factors to keep in mind when evaluating financing partners:
| Feature | Why It Matters | What to Check For |
|---|---|---|
| Payment Structure | Impacts cash flow management | Payments tied to sales volume for added flexibility |
| Platform Integration | Keeps operations running smoothly | Compatibility with your eCommerce platforms |
| Funding Speed | Essential for inventory needs | Typical funding timelines and required documentation |
| Fee Transparency | Avoids surprise expenses | Clear fixed fee percentages and total cost breakdown |
| Seasonal Flexibility | Fits your business cycles | Payment terms that adjust during slower periods |
Now, let’s see how Onramp Funds meets these needs.
Onramp Funds: A Solution Designed for eCommerce Sellers
Onramp Funds focuses on helping seasonal eCommerce businesses with financing solutions that integrate seamlessly with major eCommerce platforms. Their data-first approach allows for quick funding decisions based on real sales data.
Here’s what makes their service stand out:
- Funding decisions in as little as 24 hours
- Repayment plans that adjust with sales performance
- Easy integration with major eCommerce platforms
- No fixed monthly payments
- Transparent fees ranging from 2-8%, depending on terms
The results speak for themselves. Businesses using Onramp Funds have reported an average revenue increase of 40% within 180 days of receiving funding. This highlights the platform’s ability to help seasonal sellers grow during critical periods.
"Onramp has simplified cash flow by automating everything: easy to request, set it and forget it payments - quick and fast!" says Torrie V., Founder of Torrie's Natural, who successfully used Onramp Funds to handle seasonal inventory demands.
Their automated revenue verification reduces administrative overhead, letting you focus on running your business. With more than 3,000 eCommerce loans processed, Onramp Funds has a proven track record of supporting businesses with seasonal sales patterns.
Making Your Decision
Main Points Review
When considering revenue-based financing (RBF) for your seasonal business, here are the key factors to evaluate:
| Factor | Impact on Seasonal Business | Key Consideration |
|---|---|---|
| Sales Pattern | Payments adjust during slower periods | Review your annual sales trends |
| Growth Potential | Average revenue boost of 40% in 180 days | Plan for inventory and marketing needs |
| Funding Speed | Capital available within 24 hours | Useful for gearing up for busy seasons |
| Qualification | Requires $3,000 minimum monthly revenue | Check your recent sales performance |
RBF's repayment model aligns with your sales cycles, making it a great option for businesses with predictable peak seasons. With this in mind, let’s look at the steps to get started.
Getting Started
Here’s how to begin with RBF:
- Analyze Your Sales Data: Look at at least 12 months of sales to identify your busiest and slowest times. This helps you plan your funding needs around peak demand.
- Calculate Your Funding Needs: Think about what you’ll need for immediate inventory and how you can invest in future growth. Many seasonal businesses use RBF to stock up before their busiest periods.
Some providers offer quick verification through your eCommerce platform, simplifying the process. For example, Onramp Funds has helped seasonal sellers secure inventory financing with ease.
Choose a provider that understands seasonal sales cycles and offers terms that align with your business patterns. Once you’re ready, connect with a provider to kick off your application.
