Capital Comparison

Revenue-Based Financing vs. Bank Loans

No collateral. No personal guarantees. No fixed payments.

Traditional bank loans are the default for many business owners — but they're designed for stable, asset-heavy businesses, not high-growth companies. If you've ever been turned down by a bank or found their terms too restrictive, revenue-based financing may be a better fit.

Side by Side

How They Compare

Feature
Peers & Co (RBF)
Bank Loans
Collateral Required
None
Often required
Personal Guarantee
None
Commonly required
Repayment
1–4% of monthly revenue
Fixed monthly payments
Covenants
Zero
Multiple financial covenants
Underwriting Basis
Revenue growth & trajectory
EBITDA, assets, credit score
Equity Dilution
None
None
Time to Close
Weeks
1–3 months
Flexibility
High — payments flex with revenue
Low — fixed schedule
Profitability Required
No
Often yes

Decision Guide

Which Is Right for You?

Choose Revenue-Based Financing

If you're a high-growth company without significant hard assets, or if fixed monthly payments would strain your cash flow, revenue-based financing is a better fit. We underwrite on revenue growth — not EBITDA or collateral — and our flexible repayment means you're never forced into a cash crunch by a fixed payment schedule.

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When Bank Loans May Be Better

Bank loans are a good fit for stable, profitable businesses with hard assets and predictable cash flows. If you have real estate, equipment, or strong EBITDA and want the lowest possible cost of capital, a traditional bank loan may be cheaper than revenue-based financing.

FAQ

Common Questions

Why can't high-growth companies get traditional bank loans?
Banks underwrite on EBITDA, hard assets, and credit history. High-growth companies often reinvest heavily, showing low EBITDA or losses, and may not have significant hard assets. Revenue-based financing underwriters on revenue growth and trajectory instead.
Is revenue-based financing more expensive than a bank loan?
The cost of capital for revenue-based financing is typically higher than a traditional bank loan, but the flexibility and lack of covenants, personal guarantees, and collateral requirements often make it the better overall choice for high-growth companies. The right comparison is total cost including the value of retained flexibility.
What happens if my revenue drops — do I still have to make payments?
Yes, but your payments automatically decrease because they're tied to a percentage of revenue. If your revenue drops 30%, your payment drops 30%. This is fundamentally different from a bank loan where you owe the same amount regardless of performance.

The information on this page is for general informational purposes only and does not constitute financial, investment, legal, or tax advice. All financing is subject to underwriting approval and eligibility criteria. Past performance is not indicative of future results. Peers & Company is a merchant bank, not a registered investment advisor. Consult qualified financial and legal advisors before making financing decisions.