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Small Business Financing in Ft. Lauderdale, FLL Understanding How Revenue Based Funding Works

There’s an opportunity to expand the market share, but the business owner doesn’t have the capital on hand to meet the challenge. All the bills are paid and there’s money in the bank, but the terms of a traditional business loan would create stress on the cash flow. There is an alternative form of Small Business Financing in Ft. Lauderdale FL that the business owner would do well to investigate. That option is known as revenue based funding.

How Does It Work?

Revenue based funding is a loan in the strictest sense, but it isn’t structured like a standard business loan. The emphasis is on the cash flow of the company rather than the credit rating. Essentially, the lender agrees to provide the client with an agreed upon amount of cash. That amount, plus an additional percentage of that principal amount, is to be repaid within a specified period of time. In many cases, the money will be available to the business owner within one business day after the application is approved.

What are the Repayment Terms?

One of the benefits that this type of Small Business Financing in Ft. Lauderdale FL provides is that there is no set monthly payment. Instead, the amount paid to the investor is a fixed percentage of the cash flow for the most recently closed period. What this means is that if the business takes in an unusually high amount of cash during the most recent month, the payment to the investor will be larger. Should the cash flow be a little sluggish the next month, the amount forwarded to the investor will be lower. Browse the website to know more.

Can the Debt Be Retired Early Without Penalties?

Some business financing solutions are structured to discourage borrowers from paying off the debt early. With revenue based funding, investors are happy when the debtor is able to pay back the agreed upon amount in less time. That’s because they recoup the original investment sooner rather than later, plus they generate a return on that investment in a shorter period of time.

If some type of alternative Small Business Financing in Ft. Lauderdale FL would help a business owner grow the business and generate more cash, talk with the team at 1st Atlantic Funding today. If revenue based funding is not the most practical solution, there are other alternatives that the team can present for consideration.