Working Capital using Revenue Base Financing
Get the most out of your working capital by using revenue based financing.
Use Revenue based financing for your working capital.
For businesses with recurring revenue models, securing working capital is crucial, yet traditional financing routes like bank loans or venture capital (VC) can pose challenges.
For bank loans, the issue often lies in the collateral requirements. Banks typically require tangible company or personal assets as security against the loan. However, for many recurring revenue businesses, their most valuable asset is their predictable, ongoing income streams, which traditional banks may not adequately value.
Venture capital, while a popular source of funding, comes with its own set of challenges, particularly when it's sought for working capital purposes. VCs are generally focused on funding rapid growth and scale, not necessarily the day-to-day operational funding needs of a business. Moreover, VC funding often involves relinquishing a portion of equity, which means losing a degree of control over the company.
Revenue-based financing (RBF) emerges as a compelling alternative in this landscape. It appreciates the inherent value of recurring revenue streams, offering funding based on the strength of these predictable incomes rather than traditional assets or equity. This approach is more aligned with the business models of recurring revenue companies, providing them with the necessary capital without the need to sacrifice equity or control.
Businesses need a MRR of 30k, positive growth and a broad subscriber base. Your business needs at least 6 months of financial data for our team to analyse. Currently, we fund European businesses across 16 jurisdictions.
On signup, businesses connect bank accounts, accounting software and subscription managers to our platform. The Levenue algorithm analyses these datasets, and if deemed eligible, our team provides you with a trading limit.
Draw on your trading limit at your discretion. The amount you trade will be offered to investors on Levenue's platform. Our pool of funding partners may then bid on your offering, and come to a fixed price via sealed bids.
Your company connects via APIs, providing access to bank accounts, accounting software and subscription managers. With these, we analyse a company's entire financial history, diving into the growth profile over time, the quality/stickiness of the underlying subscriptions, and the cash burn rate.
After our analysis is complete, we will issue a trading limit, using data alone. It is at the company's discretion how many of their subscribers they will trade for up front capital. Investors bid in a Dutch Auction for the offered contracts until a discount rate is reached.
Levenue can only underwrite recurring revenue. We do not accept one-time retail revenues, for example in an FMCG e-commerce business. If your business has a mix of revenue sources, get in touch to see if you are eligible.
We evaluate growth rate, subscriber churn and cash burn. Furthermore, we look at cash flow stability and the indebtedness of a business. We will continue to constantly analyse these key metrics throughout the life of the trade.