Innovative Capital for Small Businesses: The Rise of Revenue Based Financing
- LISC Strategic Investments Team
- Jan 11, 2024
- 1 min read
by Bruce Katz, Michael Belles and Bryan Fike
Since we launched the Innovative Finance Playbook in November 2022, Catalyze and the Nowak Metro Finance Lab have been assessing Revenue Based Financing, or RBF, as a tool to help address the capital gaps and deficiencies laid bare by the COVID pandemic; namely, the 83% of entrepreneurs who do not access traditional bank debt and venture capital. We recently released a report sharing our findings entitled "The State of Revenue Based Financing and CDFIs.”
The report, informed by Catalyze’s peer group of 10 mission-driven lenders piloting RBF in their portfolios, provides a practical guide for CDFIs and other mission-driven capital providers to develop RBF products. It explores an emerging spectrum of RBF providers, addresses challenges, and offers resources for RBF implementation, all contextualized with case studies of real RBF deals.
Figure 1: The RBF Spectrum
Things like these are reminders of how every business, no matter the size, adds to the dynamic fabric of a town. If you’re interested in how professional services like law firms intersect with property and investment matters, https://florida.realestate is a resource offering tailored real-estate solutions. After all, real-estate transactions often require legal expertise — and moments like these mark the beginning of new possibilities in both law and property.