AltCap Launches Revenue-Based Financing, Adaptable Loan Product for Growing Businesses
AltCap, an impact-focused small business lender based in Kansas City, Mo., is publicly debuting its Revenue-Based Financing product to offer entrepreneurs an accessible, flexible financing option.
Revenue-Based Financing not only provides businesses with the capital they need to grow — it also adapts to their performance, ensuring a loan payment isn’t overly burdensome to the entrepreneur.
"AltCap is committed to supporting the growth and success of businesses in the communities we serve,” said AltCap CEO Ruben Alonso III. “With the introduction of Revenue-Based Financing, we aim to provide entrepreneurs with a more flexible, sustainable funding solution that aligns with their revenue potential. This product reflects our dedication to fostering economic growth in disinvested communities and making capital more accessible to more underserved entrepreneurs."
Revenue-Based Financing is distinct from traditional business financing, or asset-based, term-debt loans. Interest is not paid on an outstanding balance and there are no fixed payments. Instead, payments are proportional to a firm’s performance, offering businesses a flexible, patient source of financing. Typical business loans rely heavily on credit history and collateral, whereas AltCap emphasizes an entrepreneur’s revenue potential in our credit decisions for a Revenue-Based Financing loan.
After rolling this product out as a pilot in Kansas City in 2022, AltCap is thrilled to now make it more widely available to entrepreneurs in Colorado, Kansas, Missouri, Nebraska, Texas, and a California affiliate.
Ideal candidates for this product are entrepreneurs who need capital to fuel significant growth or expansion for existing businesses. Revenue-Based Financing is not intended to finance typical working capital needs — i.e. to maintain existing levels of business activity — or to refinance existing debt.
The Ewing Marion Kauffman Foundation supported the pilot of AltCap’s Revenue-Based Financing product in an effort to address a pervasive lack of access to capital – specifically among entrepreneurs of color. AltCap also partnered with NED, a lending platform specializing in Revenue-Based Financing loan products, to assist in managing the loan process.
To help entrepreneurs better understand how Revenue-Based Financing works, AltCap has launched an educational program in partnership with Next Street, a mission-driven advisory firm. Learn more about Revenue-Based Financing through our educational modules here.
AltCap is a leading provider of alternative financing solutions and is dedicated to empowering businesses with flexible capital options. Our mission is to strengthen communities and small businesses with accessible financing and support. As a non-profit Community Development Financial Institution, AltCap is committed to serving our communities with integrity.
To learn more about AltCap's Revenue-Based Financing product, please visit our website.
