LEGAL DOCUMENT PREPARATION Revenue Financing
Revenue financing has many become popular recently. It has different names, like Merchant Cash Advance, Revenue Royalty Certificates, but essentially, it can be an expensive form of financing for small business.
Companies that offer such financing can charge you 2 times or more the money they lent you. You pay the total back over a period of 6 months to 3 years, by a daily or weekly withdrawal, via ACH, of up to 10% of your gross revenues.
This type of financing works great for startups (6 months or more of revenues), that cannot raise capital, via other means, due to inability to value the company. Getting investors can cost you 10-40% of your company, making your company less attractive to subsequest investors.
Revenue financing allows you to retain 100% of the equity in your company, but the lender gets paid before any investor.
Raising capital form friends and family, makes this an attractive option, when you first start out, as it insures that they get pad back in a timely manner, while you focus on growing the business.
Let our experienced professionals draft this agreement, so you can distribute it to any interested investors or friends and families. We do not provide legal advice, so you need to make sure you are compliant with securities laws. If the lender/investor is accreditted, according to SEC rules, then you are ok.
We also provide a service that prepares the (PPM) Private Placement Memorandum, that you give qualified investors, based on rule Reg D 506(c) or Reg A+. Reg A+ allows you to solicit unaccreditted investors, but accounting restrictios apply.
This is a great way to raise capital without excessive due diligence by your lender investor; usually just last 6 months bank statements and corporate certificate of good standing form your secretry of state.