Compare a business term loan with revenue-based financing: how each works, how repayment differs, what affects cost and which fits your business.
Flexcap Solutions is a Miami-based commercial finance brokerage that has funded more than $100 million for U.S. businesses through a network of 100+ lender partners.
A term loan is borrowed money repaid with interest on a fixed schedule. Revenue-based financing is a purchase of your future receivables, with the funding based mostly on your sales. A term loan usually suits planned investments and stronger credit, while revenue-based financing usually suits urgent needs and steady revenue.
| Feature | Term loan | Revenue-based financing |
|---|---|---|
| What it is | A loan repaid over a set term | A purchase of future receivables, not a loan |
| Cost | Interest, and possibly an origination fee | A factor rate set at the start |
| Repayment | Regular fixed payments | A share of revenue, or a fixed daily or weekly remittance |
| Main approval focus | Credit, revenue and time in business | Revenue and bank activity |
| Speed | A few business days to several weeks | Often 24–48 hours after signing |
| Best for | Planned, one-time investments | Fast working capital needs |
| Paying early | Depends on the loan | The total is generally set up front, so ask about early payoff |
With a business term loan, you receive a lump sum up front and repay it, plus interest, through regular payments over a set term. When the last payment is made, the loan is paid off.
Short-term loans based mainly on bank statements can be funded in a few business days. Medium-term loans that require tax returns and financial statements usually take longer, often one to several weeks.
Revenue-based financing, also called a merchant cash advance, gives your business a lump sum in exchange for a fixed amount of your future receivables. Because you are selling future sales rather than borrowing, it is priced with a factor rate.
With a percentage-of-revenue structure, your remittances shrink when sales shrink. With a fixed daily or weekly remittance, many agreements let you request a reconciliation so payments better match your actual revenue.
Do not compare a factor rate directly with an interest rate, because they work differently. Compare the total dollars you will repay or deliver, the payment amount and how often it comes out, any fees, and what happens if you pay early. Make sure the payment fits comfortably within your cash flow.
Flexcap Solutions compares options across 100+ lender partners, so you can see the total cost and repayment of each option side by side. Both products are available for business lending in the United States and Canada.
No. Revenue-based financing is a purchase of future receivables. You are selling a fixed amount of future sales, so it is priced with a factor rate instead of an interest rate.
Revenue-based financing is usually faster, with funding often arriving 24–48 hours after signing. Short-term loans can take a few business days, and medium-term loans often take one to several weeks.
Possibly. Short-term lenders put more weight on revenue and bank activity, though a lower score may affect the amount, term and cost. Medium-term loans usually need stronger credit.
Sometimes. It depends on your business, your credit and the terms of your current agreement. A Flexcap advisor can review your position with you.
No. Pre-qualifying with Flexcap Solutions does not affect your credit score.
Pre-qualify online, and a Flexcap advisor will walk you through both options, including the total cost.
Last updated: November 2026
