When applying for revenue-based financing, lenders evaluate specific metrics to assess your company's health and growth trajectory. Understanding these metrics helps you prepare a stronger application.
1. Revenue consistency
Predictable revenue is the foundation of most funding decisions.
Lenders are not only looking at how much you generate, but how stable that revenue is over time. Businesses with recurring or repeatable income streams are significantly easier to underwrite because future cash flows are more visible.
What matters:
- Monthly revenue trends
- Volatility vs stability
- Recurring vs one-off revenue
2. Growth rate
Growth signals momentum and market demand.
A business that is consistently growing, even at moderate levels, is generally more attractive than one with flat or declining revenue. Growth indicates that capital can be deployed effectively.
What matters:
- Month-on-month growth rate
- Consistency of growth
- Evidence of scalable acquisition channels
3. Profitability and burn
Profitability is not always required, but visibility on cash flow is essential.
Lenders assess how efficiently your business operates and whether you can sustain repayments. Even in loss-making businesses, controlled burn and a clear path to profitability are key.
What matters:
- EBITDA trends
- Monthly burn rate
- Cash runway
4. Existing debt and obligations
Your current capital structure directly impacts eligibility.
Too much existing debt, or poorly structured facilities, can limit your ability to take on additional funding. Lenders need clarity on what is already in place and how new capital will sit alongside it.
What matters:
- Total outstanding debt
- Repayment schedules
- Any secured or pledged assets
5. Revenue quality and customer concentration
Not all revenue is equal.
Lenders look closely at how diversified and reliable your customer base is. Heavy dependence on a small number of customers increases risk, while a broad and stable base improves eligibility.
What matters:
- Customer concentration
- Contract terms and visibility
- Churn and retention rates