The short answer
How the funding is sized
A bank loan starts with tax returns, collateral and credit. Revenue-based financing starts with your bank statements. The funder looks at average monthly deposits, how steady they are, how many low-balance days you have and what payments you already make.
A business depositing $70,000 a month with steady balances will usually see larger offers than one depositing $70,000 in a single spike followed by two quiet months. Consistency counts as much as the total.
How payments track revenue
Many revenue-based agreements set a holdback, a fixed percentage of deposits sent toward the balance. In a strong month the payment is larger; in a soft month it is smaller. The total amount owed does not change, only how fast you get there.
Some products in this family use a fixed daily or weekly amount with an adjustment process instead. Both styles fall under the broad revenue-based umbrella, and the merchant cash advance is the most common example.
Check what your business qualifies for
Merchant Fund Express reviews revenue-based financing requests from $5,000 to $5,000,000. Scores from 500 are considered, and same-day decisions are common on complete files.
Check funding options with Merchant Fund ExpressWorked example: an 8% holdback
Illustrative example. These figures are illustrations built on stated assumptions, not offers. Real pricing depends on the file MFE reviews.
Assumptions: a fitness studio averaging $70,000 in monthly deposits takes $50,000. Total payback is assumed at $63,000 (a 1.26 multiple), a $1,000 fee comes out at funding, and the holdback is 8% of deposits.
| Item | Amount |
|---|---|
| Funding amount | $50,000 |
| Fee at funding | $1,000 |
| Net cash received | $49,000 |
| Total payback ($50,000 x 1.26) | $63,000 |
| Payment in a $70,000 month (8%) | $5,600 |
| Payment in a $50,000 month (8%) | $4,000 |
| Total cost ($63,000 - $49,000) | $14,000 |
At a steady $70,000 a month, payback takes about 11.25 months ($63,000 / $5,600). If January deposits dip to $50,000, that month's payment drops by $1,600, which is the flexibility the studio is paying for.
Compared with a bank loan
| Factor | Revenue-based financing | Typical bank loan |
|---|---|---|
| Main basis for approval | Deposits and cash flow | Credit, collateral, tax returns |
| Paperwork | 3 to 4 months of statements, ID, voided check | Often years of financials |
| Decision speed | Often same day on complete files | Often weeks |
| Payment | Moves with revenue or adjusts | Fixed |
| Total cost | Usually higher | Usually lower |
If you qualify for a bank loan and can wait, it is usually cheaper. Revenue-based financing earns its place when speed, flexible payments or a thinner credit file make the bank route impractical.
Funding brings customers. Is your website ready for them?
When payments rise and fall with your revenue, every extra booking or order shortens the payback. A website that shows current classes, pricing or products and makes it easy to buy or book helps keep deposits steady. Cheap Cheap Websites builds professional sites from $399, with Website Care at $30/month including A/B testing to improve what converts.
Who it fits and who it does not
Fits: businesses with steady deposits and seasonal swings, such as studios, restaurants, auto shops and e-commerce sellers, that need money for something with a quick payback. MFE's MCA guideline commonly starts around $7,500 a month in revenue and 3+ months in business.
Does not fit: a business with irregular, lumpy deposits; one already paying several advances; or a long project that will not produce revenue for a year. For those, waiting, a line of credit or equipment financing may be wiser.
What to prepare
- 3 to 4 months of business bank statements showing all deposits
- Owner ID and a voided business check
- A short application on the MFE revenue-based financing page
- Details on any existing advances or loans
Clean statements with few overdrafts help the most. If your last month was unusually low, a short note explaining why can help the reviewer read the file correctly.
Related funding guides
Cheap Cheap Websites builds websites. It does not lend or make funding decisions. Funding is offered by our funding partner, Merchant Fund Express, and every request is subject to its review and approval. Figures on this page are illustrations, not offers. Updated October 15, 2026.