Revenue-Based Finance — eligibility, lenders, and how it works in the UK

In short

Revenue-based finance (RBF) provides growth capital repaid as a share of future revenue, typically by direct debit against a percentage of monthly revenue rather than a fixed instalment. It typically suits UK e-commerce, SaaS, marketplace and digital-first businesses with consistent online or platform sales data the lender can verify. Funding can range from around £10k to several million pounds depending on revenue, and decisions often depend on Stripe, Shopify, Amazon or banking data rather than traditional accounts alone. RBF is rarely suitable for offline-only businesses, very early-stage companies without revenue or those with weak unit economics. Pricing is usually expressed as a flat fee on top of the principal and a total repayable. RBF differs from a merchant cash advance: RBF reads the wider revenue picture and settles by direct debit, whereas an MCA settles from card-processor takings. Approval is subject to lender underwriting, data integration and use-of-funds checks.

How revenue-based finance works in plain English

Revenue-based finance sits between a traditional term loan and equity. The business receives an upfront sum and agrees to repay a fixed total — the principal plus a flat fee — by sharing a percentage of monthly revenue. Lenders such as Wayflyer, Uncapped and Outfund underwrite primarily from connected data sources: payment processors, e-commerce platforms, marketing ad accounts and banking feeds. That data-led approach can support faster decisions than traditional underwriting and lets lenders adjust offers as revenue moves.

RBF is often confused with merchant cash advance, but there are clear differences. An MCA is structured as a purchase of future card receivables, settles from the card processor as a daily or weekly holdback, prices on a factor rate and is unregulated under the Consumer Credit Act. Most UK RBF products are structured as loans (or revenue-purchase agreements with a tighter framework), settle by direct debit against a wider definition of revenue, price on a fixed total repayable and may sit closer to FCA-relevant disclosures depending on the lender's structure. The economics can look similar — choose by data fit, contract terms and total cost rather than by name.

RBF is most often used for inventory, marketing spend, channel expansion and other growth investments where return on capital is measurable and reasonably quick. Founders usually prefer it where they want capital without dilution and where seasonal or growth-stage revenue makes fixed monthly instalments uncomfortable. It is not designed for fixed long-life assets like property or heavy machinery, where asset finance or commercial mortgages fit better.

Because the product depends on data the lender can read, businesses with limited online sales history, manual reporting, or revenue scattered across many small platforms can be harder to underwrite. Strong contribution margins, repeatable customer acquisition costs and clear use-of-funds plans tend to attract better offers.

Best-fit business profile

E-commerce, SaaS, digital/marketplace sellers, recurring-revenue businesses.

Core eligibility signals

Most UK lenders in this category look for a combination of the following. Individual lender criteria vary and final approval is subject to lender underwriting.

• Online/platform revenue
• sales history
• growth/stock/marketing use case
• At least 6-12 months of trading with measurable monthly online revenue.
• Revenue concentrated on platforms the lender can integrate with (Shopify, Stripe, Amazon, WooCommerce, Recurly).
• Healthy gross margins and a clear use-of-funds for stock or marketing spend.
• UK-registered entity with a UK business bank account.

Common blockers

Where the following apply, lenders in this category may decline or deprioritise the application.

• Weak online revenue
• poor unit economics
• UK rules unconfirmed
• Predominantly offline or cash-based revenue with no platform data feed.
• Negative unit economics — paid acquisition cost above lifetime value.
• Heavy concentration on a single channel that is currently restricted or in dispute.
• Outstanding revenue-based facilities with another provider against the same data feed.

What underwriters typically look at

• Monthly recurring or platform revenue trend over 6-12 months.
• Gross margin and contribution margin per product or customer cohort.
• Customer acquisition cost, payback period and channel mix.
• Returns, refunds and chargeback ratios on e-commerce data.
• Use of funds — is the capital deployable into channels with measurable ROI?
• Existing debt and other revenue-share facilities against the same revenue.

Documents typically requested

Expect to provide most of the following. Individual lenders may ask for more, depending on the size and structure of the facility.

• Connected access to e-commerce platforms (Shopify, Amazon, Stripe, WooCommerce).
• Last 6-12 months of business bank statements.
• Latest management accounts or P&L.
• Marketing channel data — typically Meta Ads, Google Ads or TikTok Ads.
• Company information and director ID.

Watch-outs — cost and regret risk

Honest cautions on this product. None of these are reasons to avoid it automatically — they are the questions to settle before signing. This is educational guidance, not financial advice.

• Flat fees can look cheap until you compare them on an annualised basis. A 10% fee repaid over six months is materially more expensive than a 10% APR loan over a year.
• If revenue grows fast the facility clears quickly — which raises the effective annual cost. If revenue stalls, the repayment window stretches and the total stays the same.
• Plugging in marketing or banking data tends to be sticky — some providers expect ongoing access for the life of the facility.
• Stacking RBF on top of an existing MCA against the same revenue is a common decline trigger.
• Some products are dressed as RBF but operate as MCAs. Read the contract structure — purchase of receivables vs loan — before signing.