Asset Classes
RBF
Also known as: revenue-based financing, revenue-based lending
status: draft
Revenue-based financing. A funding structure where repayment is tied to a percentage of the borrower’s future revenue rather than fixed monthly payments. Common for software, e-commerce, and subscription businesses that have predictable revenue streams but limited hard assets.
What to watch
Repayment pace depends on revenue performance, so duration is uncertain. Model both upside (faster payback, lower effective yield) and downside (extended duration, potential default). Check whether the structure has a cap on total repayment (typically 1.3x to 2.0x the advance) and what happens if revenue falls below underwriting projections.
Referenced in 8 topics
Advance rates and the borrowing base mechanics Bank balance sheet capital-sources Early-stage financing guide playbooks Market intelligence market-landscape Market spreads guide market-landscape Revenue-based financing asset-classes Small business loans (including SBA 7(a)) asset-classes The economics of ABF for originators (worked examples) playbooks