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Revenue Based Financing vs Equipment Financing: Which Is Right for Your Business?

Revenue-based financing suits variable income businesses, while equipment financing works better for companies needing specific assets.

⚡ Quick Verdict

Revenue Based Financing lets you access capital based on your actual sales with flexible repayment that scales with your business, making it ideal if you need working capital fast without taking on debt. Equipment Financing locks you into fixed payments for a specific asset, which works if you have a clear purchase in mind but leaves less flexibility if your cash flow fluctuates.

Side-by-Side Comparison

Feature Revenue Based Financing Equipment Financing
Funding Amounts$25K – $2M$10K – $5M
Rates / Cost6% – 25% of revenue6% – 18% APR
Term LengthUntil repaid12 – 60 months
Funding Speed2 – 5 days3 – 7 days
Min. Credit Score580+ preferred600+ preferred
Collateral RequiredRevenue rightsEquipment itself
RepaymentFixed % of monthly revenueMonthly installments

When to Choose Each Option

Choose Revenue Based Financing when:

  • You need funding fast (same day possible)
  • Your credit score is below 640
  • You want to avoid collateral requirements
  • You need amounts from $10K up to $20M
  • You prefer a direct lender with no broker fees

Choose Equipment Financing when:

  • You already have an established relationship with Equipment Financing
  • Your business revenue primarily flows through their platform
  • You need amounts in the $10K – $5M range
  • You prefer their Monthly installments repayment structure
  • You've been declined elsewhere and want to explore all options

Why Businesses Choose SMB Capital Funding

SMB Capital Funding gets you access to capital faster than traditional equipment financing with streamlined approval processes and can provide up to $20M directly without broker intermediaries slowing things down. Unlike rigid equipment financing that requires strong credit scores, SMB Capital Funding has flexible credit requirements so business owners with varied credit histories can still qualify for the funding they need.

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Frequently Asked Questions

What is the difference between Revenue Based Financing and Equipment Financing?
Revenue Based Financing (RBF) provides capital based on your business's monthly sales, where you repay a percentage of revenue until a set amount is reached, making it flexible for fluctuating income. Equipment Financing, on the other hand, is a loan specifically for purchasing business equipment, vehicles, or machinery, where the equipment itself serves as collateral and you make fixed monthly payments. If you're exploring either option, SMB Capital Funding offers both types of financing to help small businesses grow without giving up equity or taking on traditional bank debt.
How quickly can I get funded?
SMB Capital Funding offers same-day to 48-hour funding for most products. Simply apply online and our team will reach out within minutes.
Is there a minimum credit score?
Most of our working capital products are available with a 550+ credit score. We look at your overall business health, not just your credit score.
Do I need collateral?
Most of our short-term business funding products require no collateral. Equipment financing uses the equipment itself as collateral.

SMB Capital Funding is a direct lender offering working capital solutions to US-based small businesses. Funding amounts and terms vary based on business qualifications. This comparison is provided for informational purposes. All products subject to approval.