This article highlights a creative financing option which can help startups get the capital they need to grow without sacrificing control or diluting the founding team's equity interest in the firm--revenue loans. Revenue loans are instruments whose holder receives a percentage of the pledging firm's revenues, as opposed to regular interest payments (with debt) or control interest and a stream of dividends (with equity). This article explains when revenue loans might be a preferable source of financing for your business, and points out the types of businesses which might benefit from revenue loans.
- Summary by FizzLaw Team
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An Alternative Way to Raise Capital: the Revenue Loan