Learn How to Really Get Fast & Easy Business Financing Even With Bad Credit

1. Decoding Cash Flow Financing…
How to Really Get Fast & Easy Business
Financing Even With Bad Credit

2. Revenue Based Financing
• From Wikipedia:
• “Revenue based financing or royalty based financing (RBF) is a
type of financial capital provided to small or growing businesses in
which investors inject capital into a business in return for a
percentage of ongoing gross revenues.
• Usually the returns to the investor continue until the initial capital
amount, plus a multiple (also known as a cap) is repaid”

3. • RBF is often described as sitting between a bank loan, typically requiring
collateral or significant assets, and angel investment or venture capital,
which involve selling an equity portion of the business in exchange for the
investment.
• In an RBF investment, investors do not take an upfront ownership stake in
the business
• With this type of financing you are basically selling your future revenue for a
fee (a discount)
Revenue Based Financing

4. Revenue Based Financing Names
• Revenue based financing goes by man names:
• RBF, revenue based funding, revenue based loans
• Revenue Financing
• Cash flow financing, cash flow based financing, cash flow
loans
• Bank statements loans
• ACH financing
• Royalties based financing

5. Revenue Based Financing Advertisements
• “Cash Flow Financing… Do You Have 10K p/mo Gross Sales? Quick &
Easy”
• “Cash Flow Finance… Fast & Simple Online Application Need $150K+ in
Sales, Profitable”
• “How to get business financing when banks turn you down”
• “Bad credit business loans… 24 Hour Approval. No Startups
Great Rates. Up to $500K Quick!”
• “Fast small business loans… 24Hr Approvals. Online Application.
Min $10K/Mo in Sales to Qualify!”

6. Revenue Based Financing
• Although for many small businesses this is a new concept,
this has actually been used for many years in industries to
finance the high upfront costs required in their industries
• Hollywood filmmakers
• Oil drilling outfits
• Pharmaceutical companies

7. Terms
• Revenue financing has always been popular for big industries with
loads of revenue coming in
• With these types of transactions it’s not uncommon to see 3-5 year
terms
• But recently this type of financing has really ramped up for smaller
businesses that aren’t earning millions-of-dollars
• So the new more common terms are 6-18 months

8. Revenue Financing
• Revenue financing is NOT a loan, it’s an advance off of your
revenue
• It’s very similar to a cash advance in the consumer world
where...
• Your current pay is analyzed…
• You then are lent money based on the stability and
amount of your pay…
• Then you have a short time to pay back what has
been borrowed

9. Revenue Financing Document Requirements
• With revenue financing the lender will look at two main forms of
documentation:
• Your bank statements
• Your merchant statements, if you have a merchant account
• A driver’s license is usually required
• Rent, lease, or ownership information for the property is also verified
• You can qualify even if you have a home-based business

10. Revenue Financing Requirements
• Lenders are looking for very specific requirements when qualifying
you.
• The bank statement is analyzed for:
• Consistent deposits, 8-30 per month…
• Lenders do NOT want to see only a few big deposits
• Instead they want to see many smaller deposits, such as a retail store
would have not a real estate agent

11. Revenue Financing Requirements
• Positive ending bank balances are also important
• If you don’t have money left over each month now, lenders know it will
be tough for you to pay them back
• So they are looking for positive cash flow each month
• They want to see that the bank account is managed responsibly, with
little to no NSF charges
• They also don’t want to see a lot of charge-backs which could reflect
unexpected future expenses

12. Revenue Financing Requirements
• Lenders have many restricted or high risk industries
• The finance industry as a whole is restricted

14. Revenue Financing Requirements
• The longer time you have been in business the better your
chances of being approved
• Most lenders require you be in business for 12 months or more
• There are some lenders who will lend you money if you have
been in business for only 6 months
• But in those cases they usually want to see compensating factors

15. Revenue Financing Requirements
• Personal credit is not a big factor of approval, but will tie into the
terms you will pay
• Lenders often approved business owners with scores as low as 500
• Lenders are most concerned with you being in current trouble such as
an immanent bankruptcy or very recent liens and judgments
• If you don’t have those types of issues you can get approved, even
with recent collection accounts and late payments
• This is one of the best types of financing to
secure with credit issues

16. Rates and Terms
• This is not a loan, so there is no standard
interest rate you will pay
• Instead you are selling your future revenue
for a “discount” fee
• For example, you might get a loan for
$100,000
• The lender then might charge a discount of
20%
• Your total payback would be $120,000

17. Payback Terms
• If the lender were to finance the $120,000 over 12 months,
your payback would be $10,000 monthly
• Payments are withdrawn from your bank account DAILY,
usually Monday-Friday
• So you would payback $500 per day, Monday-Friday, until
the total amount is paid back 12 months later
• The $500 is automatically deducted each day,
so in many cases you won’t notice it gone

18. Payback Terms
• You will usually be given choices where you can pay more of
a discount and get a longer term
• Or pay less of a discount and get a longer term
• Each option has a different daily payback amount
• Usually the payback amount is 8-12% of the actual revenue

19. Renewals
• Most lenders charge more money and give you a shorter
term in the beginning until you prove yourself
• Then when 50% of the amount is paid back, they commonly
will renew the advance giving you an even longer term and
lower payback
• For example:

20. Renewals
• You have paid for 6 months of your 12 months current advance
of $120,000, now owing only $60,000
• The lender looks at 2 of your most recent bank statements and
sees that you took the money and invested into your company,
and now your revenues have grown way more than what they
were
• They now lend you another $40,000
• Your term is lengthened from 12 to 18 months
• Your payback discount drops from 20% to only
12%

21. Renewals
• You already used $60,000 of what you borrowed
• Now you still have access to the other $60,000 you had outstanding, and
another $40,000 they just lent you
• $100,000 is renewed at 12%, making your total payback $112,000 on the
second advance
• PLEASE NOTE, this would mean you truly never did have to pay the full
20% you were originally charged
• $112,000 @ 12% for 18 months = $6,222 monthly, or $311 per day

22. Important Notes
• This is basically a very risky cash advance
• The terms will not be great, or anywhere close to a bank loan
• But you can easily get approved for revenue financing even
when there is no way you could qualify with a bank

23. Loan Comparison
• SBA loans require good credit, guidelines state 620 scores
are needed but you can’t have derogatory credit, so you will
really need a 700 + type of credit profile for approval
• With RBF you can get approved with a 500 score and major
derogs.
• With SBA you MUST have collateral to offset the debt
• With RBF no collateral is required

24. Loan Comparison
• With SBA you must supply 2 years of tax return, being in business
2 years or more
• With RBF you only need to be in business 6 months
• SBA loans typically take 6-12 weeks to close
• With RBF you can close in 72 hours
• SBA loans like at your entire business and personal aspects
• With RBF they are mainly looking at cash flow ONLY

25. Loan Comparison
• SBA requires extensive
documentation including:
• Personal and business bank
statements
• Personal and business tax
returns
• Resumes and background checks
• Personal and business financials
• Projected financials
• Business plan
• Good personal, business, and
bank credit
• Balance sheets and P&Ls
• Articles, licenses, leases
• Loan history
• Collateral

26. Loan Comparison
•RBF requires:
•Good bank and merchant statements
•Rental and lease information

27. Loan Amounts
• Loan amounts vary based on the current revenue of the business
• You can usually secure as much as 10-12% of your annual
revenue
• So if you make $500,000 per year in revenue…
• You could secure approximately $50,000
• Most loan amounts won’t exceed $500,000
for most small businesses
• You must have at least $120,000 in annual
revenue to qualify

28. Loan Rates and Fees
• There are no upfront charges with revenue financing
• You will be charged a discount based on risk
• This discount varies wildly based on risk factors
• Rates commonly range from 8-45%
• 20-30% rates are common
• Charges are tax deductible

29. Loan Rates and Fees
• Factors that affect risk include:
• Time in business
• Bank account management
• Positive cash flow
• Industry
• Personal credit score
• If you have past successfully paid advances

30. Loan Rates and Fees
• Remember that TERM in months is more important to
payment than rate in most cases
• Once you prove yourself you will get offers for longer terms
and lower discounts

32. Uses of Funds
• You can usually use the funds for almost any purpose
• But this type of financing doesn’t make sense just to get money
and have it sitting around
• It makes PERFECT sense if you need to re-invest money into your
company for growth:
• Buying a new truck
• Buying a competitor
• Implementing a marketing strategy
• Other ways of using the money that result in company growth

33. Approval Time
• Revenue financing is very easy and very fast to secure
• Due to limited document requirements, you can get your initial approval
within 24 hours
• Once you sign the term-sheet a due-diligence process takes place for 24-
48 hours
• During this process they are looking for potential issues such as:
• Having outstanding advances you didn’t mention
• Signs you are going out of business
• Verification that your renting/owing arrangements are in good standing

34. Approval Time
• If due-diligence is good, you can close once
this period expires
• 24 hours to underwrite initially
• 24-48 hours for typical due-diligence
• 72 hours to get funding
• Expect 7 days in case of unexpected delays

35. Merchant Advances
• Merchant cash advances work very similar to revenue financing
• Loan terms are also commonly 6-18 months
• Discount rates are typically higher, 15-50%
• Credit and document qualifying requirements are very similar

36. Merchant Advances
• With merchant advances, lenders are looking at your credit
card transactions and deposits only
• They will review your bank and merchant statements
• But only your credit card transactions will be lent against,
not other deposits such as checks
• In many cases you will be required to switch merchant
account providers upon approval

37. Merchant Advances
• Renewals also work the same with
merchant advances as they do with
revenue financing
• You can typically be approved for an
advance equivalent to one month’s credit
card processing volume

38. Summary
• Cash flow based financing is perfect for a business owner who is looking for
fast and easy money
• The approval requirements are so lenient that most people can get approved
only with having consistent cash flow
• The initial terms are a little rough, but after 3-6 months you can renew and
get significantly better terms in most cases
• Future renewals are VERY easy and fast to get, usually only requiring 2
month’s bank statements and getting advanced in 48 hours
• Gain a HUGE competitive advantage

39. Decoding Cash Flow Financing…
How to Really Get Fast & Easy Business
Financing Even With Bad Credit
Contact Us Today to Learn More