Washington State Launches Revenue-Based Financing for Small Businesses
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The new Revenue-based Financing Fund offers flexible repayment terms tied to a company’s revenue, providing an alternative to conventional loans.
The State of Washington has entered the revenue-based financing arena with the launch of the Revenue-Based Financing Fund (RBF) loan program for small businesses. The washington state Department of Commerce announced the initiative, which is administered by Grow America, on May 19th, coinciding with Broker Fair 2025.
Commerce Director Joe Nguyễn stated, “This is one of the most innovative loan programs we’ve ever launched. It’s not a typical business loan. It’s a Pay-As-You-Earn loan that works with the reality of running a small business. Rather of fixed monthly payments, businesses repay based on what they actually make. So if sales slow down, payments stay low.If business picks up, payments adjust.It’s flexible, it’s fair, and it’s the kind of practical solution we need to support small businesses across Washington.”
The program has been allocated $13 million in funding.The structure is similar to revenue-based financing offered by companies like Square and PayPal, where repayment is based on a percentage of sales. In this case, the repayment is set at 20% of sales, with a term and minimum monthly payment required.
Daniel Marsh III, president of Grow America, said, “At Grow America, we’re excited to launch the Washington Revenue-Based Financing Fund. This program offers flexible capital, empowering Washington’s small businesses, especially entrepreneurs, to scale operations and achieve enduring success.”
According to program marketing materials, “Revenue-based financing provides you with flexible upfront capital, and its payback terms are customized to your cash flow and fluctuate based on your revenue. It’s ideal for small businesses that are seasonal,may not have a consistent income,or require an alternative to a traditional loan.”
Understanding Revenue-Based Financing
Revenue-based financing (RBF) is an alternative funding model where repayment is directly linked to a company’s revenue. Unlike traditional loans with fixed monthly payments, RBF adjusts payments based on a predetermined percentage of gross revenue. This can be particularly beneficial for businesses with fluctuating income or seasonal sales patterns.
“It’s flexible,it’s fair,and it’s the kind of practical solution we need to support small businesses across Washington.”
– Joe Nguyễn, Commerce Director
Revenue-Based Financing: Key Considerations
Frequently Asked Questions
- What is revenue-based financing?
- Revenue-based financing is a type of funding where repayment is a percentage of a company’s gross revenue, offering flexibility compared to fixed loan payments.
- Who is eligible for the Washington RBF program?
- The program is designed for small businesses in Washington State, particularly those with seasonal income or those seeking an alternative to traditional loans.
- How does repayment work?
- Repayment is based on a predetermined percentage (in this case, 20%) of the business’s gross sales, with a term and minimum monthly payment required.
- What are the benefits of RBF?
- RBF offers flexible repayment terms that adjust with a company’s revenue, making it suitable for businesses with fluctuating income.
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