Revenue-based finance

Revenue-based finance has grown in the UK alongside the rise of platform businesses with verifiable digital revenue — Shopify and Amazon sellers, subscription-based SaaS, marketplace operators. The lender typically integrates with the platform or accounting system, advances a multiple of monthly revenue, and is repaid through a fixed share of monthly turnover until a predetermined total has been collected.

Like MCAs, RBF deals are usually priced with a multiplier — sometimes called a fee, sometimes a factor — rather than a conventional APR. UK multipliers tend to sit between 1.06 and 1.15 for stronger merchants on shorter terms, and higher for younger or less established businesses. Because revenue can flex, the effective time-to-repay is variable, which makes annualised cost figures sensitive to growth assumptions.

RBF differs from a traditional MCA in two ways. First, it usually draws from total business revenue rather than just card-acquirer takings, which suits businesses with mixed revenue streams. Second, the share of revenue taken is often lower than typical MCA holdbacks — 5 to 10 per cent rather than 10 to 20 per cent — leading to a longer repayment profile in absolute terms.