Choosing between revenue-based funding and a traditional bank loan is one of the most important decisions a business owner can make. Here’s what you need to know.
Traditional Bank Loans
- Fixed monthly payments regardless of revenue
- Approval takes 30-90 days
- Requires strong credit, collateral, and 2+ years in business
- Low interest rates but very hard to qualify
Revenue-Based Funding
- Payments flex with your revenue — pay more when business is good, less when it’s slow
- Approval in hours, funding in 24-48 hours
- Approves businesses banks reject
- No collateral required for most programs
Which Should You Choose?
If you have excellent credit, 2+ years of history, and can wait 60-90 days: a traditional bank loan may offer lower rates.
If you need funding fast, have less-than-perfect credit, or want flexible payments: revenue-based funding is almost always the better choice.
