Idea! Yes, you may have bold and disruptive brain waves that can give a spark to a start-up industry. You can convert that idea into an exciting venture, but the thing that is stopping you is securing the necessary funds. Funding options like venture capital and bank loans are readily available but with several barriers to work on. The solution to finance your start-ups with an easy and quick method is Revenue Based Financing (RBF). RBF is an innovative financing model that has accumulated favor in recent years.
What is Revenue-Based Financing and why?
Revenue-based Financing is also referred to as Royalty-based Financing or Revenue-based Investing. It is an ingenious financing model that provides manageable finance to start-ups in exchange for a percentage of their future revenue. RBF is getting more traction because-
- It doesn’t ask you to pay huge fixed monthly payments, challenging for early-stage companies with uncertain cash flow.
- RBF providers don’t require long bank statements.
- It does not require any equity in exchange.
- It doesn’t steal a seat on your board of directors.
- It is an easy and quick method.
- Advanced technology helps to evaluate your project and application.
- AI-enabled automated processes save you from monotonous paperwork and hefty work processes.
How does RBF Work?
For getting funds through RBF, you can go via a specific yet easy process. You just need to find trustworthy RBF investors and suggested to go through recommendations and reviews. Vedfin is one of the leading RBF investors offering the right and convenient type of debt. RBF venture works in the following way –
- Easy Application: The process starts with filling up the application form, available on the website. The data analytical and AI-enabled software processes the application and auto-generates customized loan offers for you. This unique offer is tailored for your brand considering the business cycle, repayment capacity, and trends.
- Investment Agreement: After the approval of the application, the RBF investors and start-ups enter into a mutual agreement that outlines investment terms, the percentage of revenue, and duration.
- Quick Funding: After the finalization of the agreement, the RBF investors provide capital to your start-up with the required capital. The investment amount depends on your requirements as well as the terms decided.
- Revenue Sharing: As start-ups take shape and start earning, they share a pre-defined percentage with the RBF investors, typically ranging from 2% to 10%. The percentage of revenue truly depends on the terms fixed at the time of agreement.
- Repayment Cap: The RBF agreement includes a repayment cap that states that when the start-up repaid to the investors up to a fixed amount, the agreement ends. The RBF investor will not further receive any percentage of the company’s revenue.
Why RBF is the Smartest Way to Finance Your Start-Up:
RBF from Vedfin is a smart and intelligent way to finance your start-ups because it is a time-saving process that offers flexibility and alignment of interest. It is an emerging viable alternative financing model to traditional ventures. The best thing RBF offers is the relief of paying heavy fixed monthly payments, especially during lean months. So, get ready to manage your cash flow with an easy application to vedfin.in