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Revenue-based financing is a working-capital structure where repayment is keyed to a fixed percentage of monthly business revenue rather than a fixed amortization schedule. The total repayment is capped at a multiple of the original advance (the "factor rate"). RBF flexes with cash-flow seasonality and does not require fixed collateral, making it a fit for operating businesses with consistent receivables.
MCAs are technically the purchase of future receivables, with repayment via daily ACH or split processing — typically very short-term (3–9 months) and high cost. Modern RBF is structured as a true loan with monthly repayment tied to revenue, longer terms (6–18 months), and more transparent pricing. Magnara routes to RBF lenders rather than legacy MCA shops.
RBF facilities typically range from $25,000 to $2,000,000, with terms of 6 to 18 months. Approval is sized to a percentage of average monthly deposits, commonly 1.0–1.5x average monthly revenue.
Underwriting is bank-statement-driven: 3–6 months of business bank statements, basic application data, and merchant processing statements if applicable. Personal credit is reviewed but is not the primary driver. Full tax returns are usually not required.
Soft pre-approval typically returns within 24 hours of submission. Funded capital can be wired within 1–3 business days of full document review and contract execution.