The amount you are approved for gets the attention; the repayment structure decides how the money feels six weeks later. Fixed and revenue-based structures suit different businesses, and you can usually choose.
Fixed payments
A set amount on a set schedule, weekly or monthly, until the balance is paid. Predictable and easy to budget. Best when revenue is steady and the investment pays back over time, such as a build-out or a vehicle.
Percentage of revenue
A fixed percentage, often around 5%, of what you deposit. Remittance rises in strong months and falls in weak ones. Best when sales vary, such as restaurants, retail, landscaping and tourism.
The same $40,000, two ways
| Fixed | Percentage of revenue | |
|---|---|---|
| Structure | $1,000 per week for 50 weeks | 5% of deposits until $50,000 is repaid |
| $50,000 month | $4,333 | $2,500 |
| $80,000 month | $4,333 | $4,000 |
| $25,000 month | $4,333 | $1,250 |
| Finish | Fixed date | Sooner in good months, later in slow ones |
Questions to ask yourself
- Do my deposits vary by more than 30% month to month? Lean revenue-based.
- Is this a multi-year asset? Lean fixed, with a longer term.
- Do I want a known payoff date? Fixed.
- Do I want protection in a slow month? Revenue-based.
You can switch on renewal
Affirmative Funding presents both structures where your statements support them. Many owners start with revenue-based for the first funding and move to a fixed term loan once the business is a year or two older.
Next step
See what your business qualifies for
Businesses with $20,000+ in monthly revenue and six months of history qualify. Three minutes, three bank statements, decision in minutes.