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What are the standard terms for a revenue share loan?

Revenue Share Loan Terms 101
Term Definition Average Amount
Percentage of Revenue Percentage of the business's top-line (before any expenses) revenue that it plans to pay to investors each month 2% - 10%
Maximum Total Return Each investor may continue to receive payments until they reach this multiple of the amount they invested (except in the event of default), which depends on the stage and track record of the business 1.5x - 2.0x
Target Payback Period The projected length of time, based on financial projections, it would take the business to pay back investors up to their maximum total return 3 - 5 years
Maturity The length of time until the revenue share loan becomes due and payable and the business would make full payment to investors to reach their maximum total return (unless the business were to default on the loan) 6 - 8 years

 

There are significant risks when investing in private companies, including through revenue share securities. Investors should not invest if they are not comfortable with the risk of potentially losing their entire investment.Read more about the risks of investing, and the risks of investing in revenue share securities.

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