# Revenue-based financing sizes funding on what you deposit , not what you own

URL: https://cheapcheapwebsites.com/business-funding/revenue-based-financing/
Updated October 15, 2026. Funding offered by Merchant Fund Express (https://merchantfundexpress.com/revenue-based-financing/); Cheap Cheap Websites builds websites and does not lend.

## The short answer
Revenue-based financing is business funding sized mainly on your monthly bank deposits, with repayment taken as a share of future revenue. When sales rise, payments rise and the balance clears faster; when sales slow, payments shrink. It typically needs less collateral and paperwork than a bank loan, but the total cost is usually higher, so it suits short-term needs with a clear return.

## 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.

## Worked 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.

## 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.

## Frequently asked questions
**Is revenue-based financing the same as an MCA?** An MCA is one common type. Revenue-based financing is the broader family of funding sized on deposits and repaid from revenue, whether by percentage holdback or by a fixed remittance with adjustments.

**What happens in a very slow month?** With a percentage holdback, the payment shrinks with deposits. With a fixed remittance, you can usually request an adjustment. Read how that process works before signing.

**Do I need collateral?** Usually no specific collateral is pledged, since the funding is based on your revenue. The agreement still creates obligations, so read it in full.

**How much can I get?** It depends on your average deposits and existing payments. MFE's pages describe roughly 0.5x to 1.5x monthly revenue as an illustrative range for advances.

**Will a low credit score stop me?** Not necessarily. MFE considers scores from 500 and weighs deposit history heavily for this type of funding. Stronger credit usually means better pricing.

## Website for growing businesses
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.

Apply for funding: https://merchantfundexpress.com/current-application.html?src=ccw-revenue-based-financing
Website plans: https://cheapcheapwebsites.com/products