A revenue share is best for early-stage brick-and-mortar businesses making cash. This is a promissory note that is paid back from a share of the revenues of the business. It's typically more exciting for investors than a standard loan. Since the payments vary based on revenues, it can also be safer for a company with less predictable cash flows.
Here's how it looks on the profile:
To preview a sample, download the Revenue Loan Agreement. By default, the following terms are customizable in our template:
- 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 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.