High-growth startups rarely raise seed-stage funding with loans, as debt doesn't offer enough of a return to account for the risk investors are taking.

However, loans or promissory notes can be more appropriate for small businesses that are cash-generating. One benefit of investing with a loan is that the investor often receives cash every quarter or year, as the principal is repaid alongside the interest rate. The downside of debt is you have no equity stake if the company suddenly becomes much more valuable.

A Wefunder Revenue Share Loan Agreement is a promissory note that is paid back from a share of the revenues of the business.  

Important terms in this note include:

• Gross or Net Revenues. Net revenues exclude returns or shipping costs.
• Revenue Percentage. This is the percentage of revenue that is shared.
• Repayment Amount. Typically 1.5-3.0X, this is the maximum amount you will be paid back.
• Quarterly or Annual Disbursement. Companies choose to make annual or quarterly payments.
• Defer Payments. By default, every company can miss one payment without being in default.
• Secured. Some loans may be secured with all property of the business.
  
  

Some businesses choose not to share their revenue, and instead offer something more like a car loan, using the Wefunder Promissory Note.  Important terms in this note include:

• Interest Rate. The interest rate per annum.
• Maturity Date. How many years until the loan is fully paid back?
• Quarterly or Annual Disbursement. Companies choose to make annual or quarterly payments.
• Grace Period. By default, these loans are deferred until 30 days after their crowdfunding deadline date. Some businesses may defer the start of their loan at a later date, such as when their business is scheduled to open.
• Defer Payments. By default, every company can miss one payment without being in default. This is meant to allow businesses time to recover if they have a bad year.
• Secured. Some loans may be secured with all property of the business.
• Personal Guarantee. Some loans may have an individual that personally guarantees payment.
• Subordination. Some loans are subordinate to a major bank lender.