27/6/2022
18/11/2024
How do I know if my company is eligible for FBR?
Over the course of its life, a company often needs financing over and above its own revenues. revenues to create a new product, recruit qualified staff, launch a new marketing campaign, and so on. But financing is often complex for company founders to obtain.especially for start-ups, for whom access to bank loans can be complicated. What's more, banks often require tangible guarantees, which are incompatible with digital business models (Saas: Software as a Service, e-commerce, etc.). It's in response to these problems, and to help digital companies, that the RBF or Revenue Based Financing. This new financing method, which only recently arrived in Europe, has already proved its worth in North America. In this article, we give you all the criteria for accessing RBF and the steps to follow.
What are the eligibility criteria for RBF?
If RBF is particularly aimed at digital companies. There are a number of additional criteria for accessing this type of financing:
- Operating under a company ;
- An annual turnover of at least €200,000;
- Demonstrate positive equity ;
- Be registered as a company for at least 12 months.
The criteria are therefore simple enough to allow as many people as possible to access the FBR!
How do I know if my company is eligible for FBR?
To find out if your company is eligible for FBR, you must first provide a set of accesses to your data so that the player who intends to finance you can establish a score, based on your company's profile, and thus propose the most suitable offer for your situation.
You will therefore have to provide access to data allowing the analysis of your business. Thus the data concerned will generally be your commercial data (advertising accounts and revenue platforms for an e-commerce: Shopify, Google Ads, Prestashop, etc.. ) and your financial data (bank accounts Recurly, Stripe, etc.).
Then the algorithms will assess your current situation based on your performance. Their objective is to know if your company is eligible for RBF by analysing your current situation but also the future of your company, taking into account scalability.
You will receive within 48 hours an RBF proposal, if the eligibility test is positive. You will start repaying a few months later, with an amount that will be determined by the algorithms according to your monthly performance.
In return, the company funding the FBR will charge a commission, usually between 6-9% of the amount funded, but this allows you to remain the sole decision-maker for your business! This amount will always be transparent and without hidden costs. You can renew the operation as often as you like, as you grow. RBF therefore allows you to grow your business at your own pace.
💡See also our article How to grow and finance yourself without dilution.
Which companies are eligible for FBR?
The companies eligible for Revenue Based Financing are therefore digital companies. These are mainly companies that operate with a subscription model (monthly or annual): service companies, D2C brands with a subscription (monthly boxes of beauty products for example), SaaS software publishers, etc.
For these companies, especially the monthly subscription models, the interest of RBF is to solve the problem of the "cash flow gap".
FBR compared to traditional financing solutions
Revenue based financing and bank loans
Unlike industrial companies in particular, digital companies cannot put up physical assets as collateral with banks. Thus, without tangible underlying assets or collateral, many digital companies have to slow down their development due to lack of financing. It is for this type of company that the RBF was created.
In order to access a bank loan, it is often necessary to be able to prove that the business has been in existence for several years, with cumbersome administrative procedures and significant guarantees required, without any guarantee that the loan will be granted.
Revenue based financing and fund raising
Raising private equity (or venture capital) is a dilutive type of financing. Indeed, to find financing, the founders increase their capital, thus losing part of the control of their company.
Raising funds can be time-consuming: you have to find the right investors, hold several meetings to convince them to support the project, gather documentation on the company and go through a lot of legal formalities, which can also be very costly.
Receipt of funds usually takes place only 6-9 months after the first stage of fundraising. Thus, RBF has the advantage of being a fast and non-dilutive solution for company founders.
FBR at Karmen
Karmen is a non-dilutive funding solution that helps digital businesses access instant growth capital. Instead of waiting for online or subscription revenues to be collected month after month, Karmen unlocks the annual value of those revenues, up front. Karmen's solution allows digital businesses to access instant growth capital, within 48 hours, to fund their growth expenses (customer acquisition, marketing, recruiting, technology and more).
For start-ups, we are often their first source of growth capital to help them accelerate before raising funds.
For venture-backed companies, we provide an additional source of non-dilutive, founder-friendly capital to help entrepreneurs achieve their growth objectives, while retaining ownership of their company.
At Karmen, nothing could be easier:
- Fill in the online form in less than 2 minutes available right here;
- Access our financing simulation;
- Connect your different accounts to our platform (subscription management solutions, CRM, Ads solutions, bank accounts etc.);
- Receive a financing proposal with no hidden costs and no interest, with only a commission, offered in advance;
- Get your funds in less than 48 hours.
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This means that you will get your financing very quickly in less than 48 hours, so that you can manage your finance needs with agility.
In conclusion, the RBF is the best way for digital companies to obtain financing quickly and adapted to their business, without hidden costs and while keeping full control of the company.
