Quick answer
Revenue-based finance is growth funding repaid as an agreed percentage of your future revenue until a fixed total, the amount advanced plus one flat fee, has been paid. Providers assess you mainly on sales data from your online store, payment platforms and bank feeds rather than on property or profit history. It suits ecommerce, subscription and app businesses funding stock or marketing that turns into sales within months.
Key points
- Repayments rise and fall with revenue, capped at the advance plus one fixed fee
- Assessed on platform and bank data, so a young but fast-growing online business can qualify
- Best used for spending with a short, measurable payback, such as stock or proven ad channels
- Keeps ownership intact, which can make it far cheaper than equity for a growing brand
- Fast payback raises the effective cost, because the fee doesn't shrink
- Repayment
- A share of revenue, or fixed instalments
- Cost
- One flat fee agreed upfront
- Typical users
- Ecommerce, subscription and app businesses
- Assessed on
- Sales platform, ad and bank data
Online brands have an awkward funding problem. They often grow fast, their biggest costs (stock and advertising) arrive months before the sales do, and they rarely own property. Banks want profit history and security. Investors want a slice of the company. Revenue-based finance sits between those two, and it was built around how online businesses actually make money.
The idea is simple: a provider advances cash today and takes a share of your revenue until a fixed total has been repaid. Getting value from it is less simple. It works brilliantly when the money funds something with a fast, measurable payback, and poorly when it doesn’t.
How does revenue-based finance work?
The provider connects to your sales data: your online store platform, payment gateways, marketplace accounts, advertising accounts and bank feeds. From that it estimates how much revenue you’ll generate and how reliably, then makes an offer with three parts:
- The advance: the amount you receive.
- A fixed fee: agreed upfront, so you know the full amount owing before you sign.
- The repayment method: usually a percentage of revenue, collected weekly, fortnightly or monthly.
As at October 2026, Wayflyer’s website lists Australia as a supported country, offers between $10,000 and $20 million, and charges one fixed fee with no origination, prepayment or late fees. According to its website, businesses can choose to repay either as a percentage of sales (its cash advance) or in fixed instalments (its term loan), on a fortnightly or monthly schedule. Its stated entry point is six months of trading history plus monthly sales of at least $10,000.
Unlike a standard loan, the term isn’t fixed. A strong quarter clears the balance faster; a slow one stretches it out.
Revenue-based finance vs a merchant cash advance
The two products share DNA, and the labels are sometimes used interchangeably. The practical differences:
| Revenue-based finance | Merchant cash advance | |
|---|---|---|
| Who it targets | Online stores, subscription and app businesses | Cafés, shops and venues with card terminals |
| Revenue measured | Total sales across platforms and bank accounts | Card sales through one payment provider |
| How it’s collected | Periodic debit based on reported revenue | Deducted from each day’s card settlement |
| Typical use | Stock and digital marketing | Equipment, refurbishment, seasonal stock |
| Assessment | Store, ad and bank data | Terminal processing history |
Our revenue-based finance vs merchant cash advance comparison covers which fits in more detail. Some payment platforms also offer their own sales-linked loans to sellers; our profile of PayPal business loans is one example.
What should revenue-based finance pay for?
The product shines when there’s a short, measurable line between spending the money and earning it back. Two classic uses:
Stock for a known peak. An online retailer that sells through November and December has to pay suppliers in August or September. Funding that stock means the repayments land when the sales do. See funding seasonal stock for how to size that order.
Advertising with proven returns. If you know from your own data that every $1 spent on a particular ad channel brings back $3 in revenue within 30 to 60 days, funding more of that spend is close to a mechanical decision. Our page on funding marketing and advertising goes further into measuring that return.
Where it’s weaker: experimental marketing, fit-outs, hiring that takes a year to pay off, or plugging ongoing losses. Repayments start almost immediately and rely on revenue staying where the provider expected.
Not sure whether your growth plan suits revenue-linked funding or a more conventional loan? Run it past a specialist; your credit file stays out of it at the enquiry stage.
A worked example: stock ahead of the sales season
An Adelaide skincare brand sells mainly through its own online store and averages $180,000 in monthly revenue. By August it wants $150,000 to pre-order product and lift ad budgets before the November and December rush.
It’s offered $150,000 with a $12,000 fixed fee, so it will repay $162,000, collected as 8% of monthly revenue.
- At its normal $180,000 a month, repayments are $14,400, and the balance would clear in a little over 11 months.
- If the peak delivers as planned (say $400,000 a month in November and December), those two months alone repay $64,000, and the total clears in roughly eight to nine months.
The fee is $12,000 in both cases. Faster repayment means the brand used the money for less time, so the effective cost per month is higher, but that’s only a problem if the brand didn’t need the money that long anyway. The useful check: would the stock and ads generate more than $12,000 in extra gross profit? If gross margin on the extra sales is 60% and the campaign adds $200,000 in revenue, that’s $120,000 of gross profit against a $12,000 fee.
Run the fee through our factor rate calculator to compare it with a conventional loan quote on equal terms.
Is it cheaper than raising equity?
For many growing brands, yes, by a wide margin. Imagine the same skincare business instead sells 10% of the company to an investor for $150,000, implying a $1.5m valuation. If the business is worth $4m three years later, that 10% is worth $400,000, and the investor keeps it forever. The revenue-based finance cost $12,000 and ended when the last repayment cleared.
The flip side: equity investors share the downside. If the peak flops, an investor absorbs part of the loss, whereas a finance provider still expects its fee. Government guidance on business.gov.au sets out the broader trade-off between debt and equity, and our debt vs equity funding comparison works through it for Australian owners.
What providers look at
| What’s assessed | Why it matters |
|---|---|
| Monthly revenue and trend | Sets the size of the advance and the expected repayment speed |
| Gross margin | Thin margins mean a revenue share bites harder into cash |
| Marketing efficiency | What each customer costs to win, and what each ad dollar brings back, show whether more spending will pay back |
| Refunds and chargebacks | High returns reduce the revenue that’s really yours |
| Stock position | Too much slow-moving stock suggests the advance may not turn over quickly |
| Existing finance | Other revenue-linked or daily-repayment facilities compete for the same sales |
Pros and cons
Advantages
- No equity given away and no board seat
- Repayments ease automatically in a slow month
- Assessed on live sales data, so a young, growing brand can qualify
- One known fee makes the total cost clear upfront
Drawbacks
- Fast payback makes the effective cost high
- Only works if revenue holds up; a sales slump extends the debt
- Can cost more than a bank loan for an established, profitable business
- Revenue share reduces cash during your busiest months
Other routes worth comparing
- A bank loan or overdraft, if you have the history and profit to qualify. Banks are often the cheapest source of funds, and worth asking first.
- Business line of credit for repeated stock purchases, paying only on what’s drawn.
- Trade finance if you import stock and need suppliers paid before goods arrive.
- Unsecured business loans with fixed instalments, which can be cheaper when sales are steady.
For how lenders view online retail as a sector, see ecommerce and online store business loans.
Growing an online brand? Let’s find funding that matches the curve
Revenue-linked funding is a sharp tool for a business whose spending turns into sales quickly. Whether it beats a line of credit, trade finance or a fixed loan depends on your margins, your peak and what you already owe, which is exactly what we look at.
The enquiry is about a minute’s effort and leaves your credit score untouched. You won’t be passed along to a queue of funders; one person on our team works through your figures and calls you to discuss them. Include honest monthly revenue, gross margin and any existing finance, and we can point you to the strongest fit straight away.
Frequently asked questions
What is revenue-based finance?
It's funding where you repay a set percentage of your revenue until you've paid back the amount advanced plus an agreed fee. There's no running interest and no equity given up. Repayments shrink in slow months and grow in strong ones.
How is revenue-based finance different from a merchant cash advance?
They share the same core idea. A merchant cash advance usually takes a slice of card terminal sales and is offered by payment providers to shops and venues. Revenue-based finance is typically aimed at online businesses and draws on total revenue across store platforms, payment gateways and bank accounts.
Who qualifies for revenue-based finance in Australia?
Providers usually want a trading history of at least several months and steady monthly sales. Wayflyer, for example, lists Australia among its supported countries and asks for at least six months of trading and $10,000 or more in monthly sales, according to its website as at October 2026.
Does revenue-based finance need a personal guarantee?
Practice varies between providers. Some rely on the business and a general security interest over its assets, while others ask directors to guarantee. Ask before accepting, and read the security section of the agreement.
Is revenue-based finance cheaper than equity?
For a business that's growing quickly, often yes over the long run. The fee is fixed and known, while equity sold today could be worth many times more in a few years. For a business with uncertain growth, equity shares the risk with investors in a way debt doesn't.
What can I use revenue-based finance for?
Mostly stock, digital advertising and other growth spending that turns into revenue within a few months. It's less suited to long-life assets, fit-outs or covering ongoing losses, because repayments start straight away and rely on sales holding up.