How is revenue-based funding repaid?
The funder provides a lump sum and collects an agreed share of future sales until a set total is repaid. Collection happens either as a percentage of daily card settlements or as a fixed estimate that can be adjusted when sales change. Read how adjustments work, because that is what protects you in a slow stretch.
Two structures are common:
- Split of card sales: a percentage of each day's card settlements goes to the funder. A rainy Tuesday repays less than a packed Saturday.
- Estimated fixed debit with reconciliation: a set daily or weekly amount based on average sales, with a process to adjust it if sales fall. Ask exactly how and how quickly that adjustment happens.
Which restaurants does revenue-based funding suit?
It tends to suit restaurants with steady card volume, clear seasonality and a short, specific need, such as stocking up for summer, a marketing push or a quick repair. It also helps when a restaurant has strong sales but limited time in business or thinner credit. It is less suited to long projects that pay back over years.
A seaside seafood shack that does most of its sales from late spring to early fall is a typical example: payments rise with summer traffic and ease in the off-season. A pizzeria with heavy delivery-app volume should check whether platform payouts count as sales and how they are collected; see our pizzeria funding page.
| Feature | Revenue-based funding | Term loan |
|---|---|---|
| Payment | Moves with sales or adjusts | Fixed schedule |
| Typical cost | Often higher | Often lower for strong files |
| Best for | Short needs, seasonal sales | Defined, longer projects |
| Main review focus | Card and bank deposits | Financials, credit, project budget |
What does revenue-based funding cost?
Cost is usually shown as a total repayment amount or factor rather than an annual interest rate, which makes comparisons tricky. Because repayment is often quick, the effective annual cost can be high compared with term loans or lines of credit. Ask for the total repayment, the expected term at your normal sales, and any fees, then compare.
A simple comparison worksheet:
- Amount you actually receive after any fees.
- Total amount you will repay.
- Expected time to repay at your average weekly sales.
- What happens if sales drop by a quarter for a month.
Put a term loan or line of credit offer next to it using the same four lines.
When should a restaurant avoid revenue-based funding?
Avoid it for build-outs, new locations and other long-payback projects, and avoid stacking several sales-based products at once. Multiple collections from the same sales can leave too little for payroll and food. If you already carry daily or weekly payments that feel heavy, look at options to lower your payment or stretch the term before adding more.
For long projects, restaurant term loans or SBA loans usually fit better. For equipment, equipment financing keeps the cost tied to the asset.
What do funders review for revenue-based funding?
Requirements vary by product and funder; many look at time in business, monthly revenue and credit. Sales-based funders usually focus on card processing statements, bank deposits, consistency across months, average balances, overdrafts and any existing daily debits. Some approvals come within a day or two, depending on documents, but nothing about timing or approval is promised.
Our guide to what funders look for when a restaurant applies explains how each of these is read.
What you’ll typically need
- Recent business bank statements
- Recent card processing statements
- Owner ID and business details
- List of existing loan or advance payments
Frequently asked questions
Is revenue-based funding a loan?
Structures vary. Some are loans with payments tied to revenue, and others are purchases of future receivables, such as a merchant cash advance. The legal structure affects how the agreement works and which disclosures apply. Read the agreement closely and ask a qualified advisor if anything is unclear.
Do delivery-app payouts count toward sales?
Sometimes. Some funders count platform deposits in your bank statements, while collections are often taken from card processing. Ask how delivery revenue is treated in both the review and the repayment, especially if it is a large share of your sales.
What happens in a slow month?
With a true percentage of card sales, collections fall with volume. With an estimated fixed debit, you usually need to request an adjustment and provide statements. Know the adjustment process before signing, not after the slow month arrives.
Can I repay revenue-based funding early?
Many agreements set a fixed total repayment, so paying early may not reduce the cost. Some offer early-payment discounts. Ask directly and get the answer in writing before comparing offers.
Payments that follow your sales
Apply once and compare revenue-based options with fixed-payment funding for your restaurant.
Updated September 14, 2026 · Restaurant Capital Now Funding Team