REVENUE-BASED FINANCING AGREEMENT
THIS REVENUE-BASED FINANCING AGREEMENT ("Agreement") is made as of [Date],
BETWEEN:
[Funder Name], a [State] [entity type], at [Address] ("Funder"),
AND:
[Company Name], a [State] [entity type], at [Address] ("Company").
1. DEFINITIONS
1.1 "Funded Amount" means $[Amount], the total capital advanced by Funder to Company.
1.2 "Repayment Cap" means $[Amount], being [1.3x-2.0x] the Funded Amount, representing the maximum total amount Company shall repay.
1.3 "Revenue Share Percentage" means [Percentage]% of Monthly Revenue, to be paid to Funder until the Repayment Cap is reached.
1.4 "Monthly Revenue" means Company's total gross revenue in a calendar month, including all sales, subscriptions, service fees, and other income, before deduction of costs, expenses, or taxes.
1.5 "Monthly Payment" means the Revenue Share Percentage multiplied by Monthly Revenue for the applicable month.
1.6 "Minimum Monthly Payment" means $[Amount], the minimum amount due regardless of Monthly Revenue.
1.7 "Payment Term" means the period from disbursement until the earlier of: (a) full payment of the Repayment Cap; or (b) [60] months from the Effective Date.
2. FUNDING
2.1 Disbursement. Funder shall advance the Funded Amount to Company within [5] business days of execution via wire transfer.
2.2 Use of Funds. Company shall use the Funded Amount for: [general business operations / specific purposes: marketing, inventory, hiring, equipment].
2.3 Not a Loan. The Parties acknowledge this arrangement is a purchase of future revenue, not a loan. No interest rate applies; the Repayment Cap represents the total return to Funder.
3. REPAYMENT
3.1 Monthly Payments. Beginning [30] days after disbursement, Company shall remit the Monthly Payment to Funder within [5] business days after each calendar month end.
3.2 Minimum Payment. If the Monthly Payment (calculated as Revenue Share Percentage × Monthly Revenue) is less than the Minimum Monthly Payment, Company shall pay the Minimum Monthly Payment.
3.3 Revenue Reporting. Company shall provide Funder with: (a) monthly revenue reports within [10] business days of month end, certified by an officer; (b) quarterly financial statements; (c) annual audited financial statements (if available).
3.4 Payment Method. Payments shall be made by [ACH/wire transfer] to Funder's designated account. Company hereby authorizes ACH debits from its account at [Bank Name], Account #[Number], Routing #[Number].
3.5 Completion. Once the total of all Monthly Payments equals the Repayment Cap, this Agreement shall terminate and Company shall have no further payment obligations.
3.6 Early Payoff. Company may prepay the remaining balance at any time. If prepaid within [6] months, Company shall pay [90]% of the remaining Repayment Cap balance. After [6] months, Company pays the full remaining balance.
4. COMPANY COVENANTS
4.1 Business Operations. Company shall continue to operate its business in the ordinary course and use commercially reasonable efforts to maintain and grow revenue.
4.2 Financial Reporting. Company shall maintain accurate books and records and provide Funder access to review upon [5] business days notice.
4.3 Banking. Company shall maintain its primary operating account at [Bank Name] and shall not change its primary bank account without [30] days prior notice to Funder.
4.4 Negative Covenants. Without Funder's prior consent, Company shall not: (a) take on additional revenue-based financing or similar obligations; (b) sell or transfer substantially all assets; (c) make distributions or dividends exceeding $[Amount] annually; (d) materially change the nature of its business; (e) merge with or acquire another entity.
4.5 Tax Compliance. Company shall file all tax returns and pay all taxes when due.
5. FUNDER'S RIGHTS
5.1 Audit Rights. Funder may audit Company's financial records once per year at Funder's expense. If an audit reveals underreporting of revenue exceeding [5]%, Company shall bear the audit costs and immediately remit the shortfall.
5.2 Dashboard Access. Company shall provide Funder read-only access to its revenue tracking systems (e.g., Stripe, payment processor dashboards) for verification purposes.
6. DEFAULT AND REMEDIES
6.1 Events of Default: (a) failure to make payment within [10] days of due date; (b) material underreporting of revenue; (c) breach of covenants not cured within [30] days; (d) bankruptcy or insolvency; (e) cessation of business; (f) material adverse change in business.
6.2 Remedies. Upon default, Funder may: (a) declare the full remaining Repayment Cap immediately due; (b) increase the Revenue Share Percentage to [Percentage]% until cured; (c) exercise any other legal remedies.
7. REPRESENTATIONS AND WARRANTIES
7.1 Company represents: (a) accurate financial information provided; (b) no pending litigation that would materially affect business; (c) no existing revenue-sharing or similar obligations; (d) authority to enter this Agreement.
7.2 Funder represents it has authority and available funds to perform.
8. PERSONAL GUARANTEE
8.1 [Guarantor Name], as [owner/principal] of Company, personally guarantees Company's obligations under this Agreement up to $[Amount / full Repayment Cap].
9. GOVERNING LAW
9.1 This Agreement shall be governed by and construed in accordance with the laws of the State of [State/Jurisdiction], without regard to its conflict of law provisions.
9.2 Any disputes arising under this Agreement shall be resolved in the courts of [County], [State], and each Party consents to the exclusive jurisdiction thereof.
10. SEVERABILITY
10.1 If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall continue in full force and effect.
11. ENTIRE AGREEMENT
11.1 This Agreement constitutes the entire agreement between the Parties and supersedes all prior agreements and understandings. No amendment shall be valid unless in writing signed by both Parties.
12. NOTICES
12.1 All notices shall be in writing and delivered by: (a) personal delivery; (b) certified mail, return receipt requested; or (c) overnight courier, to the addresses set forth above.
13. FORCE MAJEURE
13.1 Neither Party shall be liable for failure to perform due to circumstances beyond reasonable control, including acts of God, natural disasters, war, pandemics, or government actions.
DISCLAIMER: This template is for informational purposes only and does not constitute legal advice. Consult qualified legal counsel before executing.
SIGNATURES
[PARTY A]:
Signature: _________________________ Name: [Full Name] Title: [Title] Date: __________
[PARTY B]:
Signature: _________________________ Name: [Full Name] Title: [Title] Date: __________
