Revenue-Based Financing Agreement
Alternative financing arrangement where repayment is based on percentage of future revenue rather than fixed payments, typically used by growing businesses.
Key Clauses
Financing Terms
Defines total financing amount, funding disbursement procedures, and overall repayment cap limits.
Revenue Definition
Clarifies what constitutes qualifying revenue for repayment calculation purposes.
Payment Terms
Establishes percentage of revenue owed, payment frequency, and minimum payment requirements.
Use Of Funds
Restricts financing proceeds to specified business purposes and growth activities.
Business Covenants
Requires borrower to maintain certain business practices and financial reporting standards.
Default And Acceleration
Defines default conditions and lender's right to accelerate repayment obligations.
Use This Template
When You Need This
- Growing business needing capital without diluting equity ownership
- Companies with strong revenue growth but limited traditional collateral
- Seasonal businesses requiring flexible repayment tied to revenue cycles
- Avoiding personal guarantees or restrictive debt covenants of traditional loans