Revenue-Based Financing Calculator
See the real cost of a revenue-based financing cap multiple — and why your own growth makes it MORE expensive per year, not less.
Written by Dorothy Ibrahim, 10+ years in banking & finance
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How we calculate this
This calculator prices revenue-based financing (RBF) the way it actually behaves: you receive an advance, repay a fixed cap multiple of it (say 1.4× — $140,000 on $100,000), and remit a set share of monthly revenue until the cap is hit. Because the total cost is fixed, the only variable is time — and your own growth compresses it. The tool simulates your revenue month by month and converts the remittance stream into a true APR, then shows how that APR climbs as growth accelerates.
The formulas
- Total repayment
- advance × cap multipleFixed at signing — growth changes when you finish paying, never how much.
- Monthly remittance
- revenue share % × that month's revenue, where revenue in month m = current monthly revenue × (1 + monthly growth)^m
- Repayment time
- the number of months until cumulative remittances reach the cap (the final month is a partial payment)
- True APR
- the internal rate of return on the actual cash flows: the advance received now versus each simulated monthly remittance until repaid
- Growth scenarios
- the same simulation rerun at 0%, 2%, 5%, and 10% monthly growth to show repayment time falling and APR risingIf the advance is not repaid within 120 months, the APR is computed over that horizon and may understate the cost.
Worked example
- Say you take a $100,000 advance at a 1.4× cap with a 6% revenue share, on $80,000/month revenue growing 2% per month.
- Total repayment is fixed at $100,000 × 1.4 = $140,000 — a $40,000 cost no matter what happens.
- The first month's remittance is 6% × ($80,000 × 1.02) = $4,896, and each month's grows with revenue.
- Cumulative remittances reach the $140,000 cap in about 23 months, which works out to roughly a 33.6% APR.
- Rerun at other growth rates, the fixed $40,000 cost annualizes very differently: 0% growth → about 30 months at ~28.7% APR; 5% → 18 months at ~39.9%; 10% → 14 months at ~48.8%. Faster growth, same dollars, higher APR.
Rates, benchmarks & sources
- The APR is solved from the advance, cap, share, revenue, and growth figures you enter. — Internal-rate-of-return math on your own inputs (no external constants)
- The comparison ranges shown alongside your APR — MCA/RBF commonly 40–350%, versus roughly 10–15% SBA, 8–15% bank term, 15–35% online term. — Industry rule of thumb (benchmarks.ts financingAprRanges)
- Verdict tiers shared with the MCA tool: under 36% expensive but sometimes rational; 36–100% very high cost; above 100% costs more than almost any alternative. — Rule-of-thumb interpretation bands (spec §7 1.4)
Figures current as of 2026-07-02. See our methodology & editorial standards for how constants are versioned and verified.
What this tool doesn’t model
- The simulation assumes smooth compound growth at one rate — real revenue is lumpy and seasonal, so your actual repayment time (and therefore APR) will wander around the estimate.
- This is an estimate of the offer you enter, not a quote — RBF funders underwrite your revenue quality, churn, and margins, and real contracts add terms not modeled here (minimum payments, true-up clauses, change-of-control provisions).
- If negative or slow growth prevents repayment within 120 months, the APR is computed over that horizon and may understate the true cost.
- RBF contracts are typically not legally loans; this tool computes the APR-equivalent so you can compare against loans, but the legal structure and its remedies differ.
- The fixed cap means no interest savings from prepayment — refinancing out of an RBF early rarely reduces the amount owed unless the contract has an early-payoff discount, which is not modeled.
Frequently asked questions
How is revenue-based financing different from a merchant cash advance?
Mechanically they rhyme — fixed total cost, repayment that flexes with your sales, and the same faster-payback-means-higher-APR math. The differences are the base and the cadence: RBF takes a share of total monthly revenue, while an MCA holds back a slice of daily card settlements. RBF suits businesses whose revenue is not card-based (SaaS, e-commerce, services); MCA is native to card-heavy retail.
Why does growing faster make this more expensive?
Because the $40,000 cost in the worked example is locked in at signing — growth only changes how quickly you hand it over. Repay it over 30 months and it annualizes to about 28.7%; repay the same dollars in 14 months and it annualizes to about 48.8%. If you are confident in fast growth, that is precisely when a fixed-rate loan, where speed saves interest, is worth fighting for instead.
When does RBF actually make sense?
When you value the payment flexibility more than the lowest cost: remittances shrink automatically in slow months (no fixed payment to miss), there is typically no personal-guarantee-backed fixed schedule, and funding is faster than bank or SBA channels. The interpretation bands are candid about the price — at or above the mid-30s APR, cheaper alternatives deserve a look first if you can qualify and wait.
What happens if my revenue shrinks instead of grows?
Your remittances shrink with it, and repayment stretches — which cuts the effective APR but keeps the obligation alive far longer. If the simulation finds the cap is not reached within 120 months, the tool warns you and computes the APR over that horizon, which may understate the true cost. Check your contract for minimum-payment or term clauses; many real agreements do not let repayment stretch indefinitely.
Can I pay an RBF off early to save money?
Usually not in the way loan intuition suggests. The cap multiple fixes the total repayment, so writing a check for the remaining balance tomorrow saves no interest — you simply reach the same $140,000 sooner, which raises the effective APR. Some contracts offer early-payoff discounts that genuinely reduce the cap; unless yours does, prepaying an RBF buys freedom, not savings.
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themoneysheet provides educational estimates, not financial, tax, or legal advice. Figures use published rates and formulas current as of the date shown, but your situation may differ. Consult a qualified professional (CPA, attorney, or licensed advisor) before making financial decisions. Rates shown are estimates; actual offers depend on lender underwriting.