4 Tips for Landing Revenue-Based Financing

No profit? No assets? No problem.

By Michelle Goodman • Mar 18, 2015

On solid ground: John Stewart of Cloudbilt.

Opinions expressed by Entrepreneur contributors are their own.

John Stewart knew his company needed a hefty cash infusion to transition from a cloud services provider to a software provider. Without physical assets to borrow against, a bank loan was out of the question; venture capital wasn't an option, either. "We were too late for angel funding and too early for growth funding," says Stewart, CEO of Charlotte, N.C.-based Cloudbilt.

His solution: borrow $1 million from Lighter Capital, a Seattle financing firm that specializes in revenue-based deals with small businesses poised for big growth. Rather than forfeit equity or repay a fixed monthly amount, Cloudbilt pays Lighter Capital 7 percent of its monthly revenue. The more the company makes in a given month, the faster it repays the debt.

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