When you invest in a business-- no matter if it is a publicly traded company or a small business in your community-- you receive something from the company in return for your investment. This can be equity ownership, it can be interest on a loan, or it can be a combination of the two. A revenue share loan is a loan designed to pay you back through monthly payments based on the business's revenue (assuming the business has revenue), paid until a maximum total return is reached.
Highlights:
- In return for your investment, the company plans to pay you back by giving you a percentage of the top-line revenue that it generates each month.
- The company usually plans to make monthly revenue share payments in the month following the end of the fundraise.
- The monthly revenue share payments are electronically deposited directly into the bank account or self-directed IRA account that you choose.
- The company plans to continue making the monthly revenue share payments until you have received the maximum total return.
- If the maximum total return has not been paid back by the maturity of the loan, it becomes immediately due and payable.
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