Revenue-based financing also known as royalty based financing is the newest method and addition to the investment approach nowadays.
It is a form of funding. Sometimes there is a misconception about RBF. It may be called as an advance type loan but it is not like that. It is paid for advancement in the revenue.
For a consumer world, the procedure of RBF can be seen as a cash advance. Truly, it has some other method according to the recent financing activities.
There are some introductory things about RBF. You will need to have the downward qualities to get the advance of your total revenue:
• Firstly, it is about the current pay. Analyzing the amount will make you qualified for the money.
• Your regular income will determine whether you are able to pay the money or not.
• The time is really limited to paying off the money. As the time is short, the interest rate of RBF will not matter at all to the borrower.
The verification process of getting the money is extremely strict
The two-layer verification and documentation will be needed. The first one is connected to the bank statement. If you have a working bank account, the lenders will check it out to take the total information.
The other one is about your merchant statement which can make you more eligible for the advance of the total revenue of the investment.
The next part is about the category of the business. You can even apply for a home-based business.
Nowadays, catering service and good business are running since at home. So, it means that if you own one of them or another type, then you will be counted as a client of RBF.
The specification of the documents is really serious because the lenders will count only your legal documents. There is no need to submit extra papers.
You may ask the importance of analyzing the bank statement.
Before applying for RBF, make sure that you have a consistency of 8-10 months. Then, they will understand your financial stability.
The bank is truly important so you will need to show that every bank account has been dealt positively
Paying for every loan timely will make you more qualified for this one. The longevity of the business is also very crucial. It will help you for faster approval.
When you stay in the business for more than one year, the lenders will be satisfied and sanction the loan as you demand it.
Today we are aware of what personal credits are and actually mean, but despite this, having the knowledge to find the right or the right, can become an art.
We must not withdraw the eye of this credit since more than one occasion occurs when it sounds like a very close word we end up requesting one that was not closely related to personal loans and this decision obviously at the time of payment becomes difficult to deal with.
Banks are well aware of their objectives and one of them is to increase the business. However, the requirements which they have studied the safest roads have become the hardest and the consequences demanded more extensive.
Sometimes it seems that banks are only willing to give credit to those who do not urge them.
Suggestions when we consider a financial action
Strictly, you need to adapt the request for personal credit to our real monetary need. You have to apply for the money and forget to ask for extra because the requests are increasingly rigorous.
Document expenses. You have to attach an invoice with the purpose to know what we are going to pay with those goods besides to remember and be aware of the reason for the credit.
Payroll as collateral. Our benefit is the guarantee so the recent and constant income is of the most significant aspect. In this way and as an example, having an indefinite contract for years is an impermissible requirement.
Restore as soon as possible. Since it is not a linear business, the situation can be reached that pay is more valued than the quota itself, but if the term is shortened as quickly as possible, we will end up paying less and we will liquidate quickly. It means that is safer for us and for the bank.
Document of liquidation and protection of payments. See life insurance that pledges to repay the loan in case of death or disability. It even forces you to ask for a payment protection insurance that collects for a year the quotas in case of unemployment.
Complementary guarantees. Success is promised if, in the case of asking for personal credit, we can add guarantors with properties, stocks, deposits or third-party products. To receive credit, a minimum amount, less than normal and with extreme guarantees will be the points to win the loan in conclusion.
The first is the clearest: “We are going to have extra money!”. Now we can pay our failures, debts or even allow us a craving.
The next one is the variety with which these credits are presented since they are adapted to our personal needs. Do not take our attention to everything we do and see, that is, the requirements that the bank asks us or at the time of the request (interest).
It will not be the same to select a credit in 3 months that in 6, since the second one will be more expensive. Now a question that surely has been hovering over our heads for quite some time: “What do the banks consider to be able to give you these credits?”
Well, in response, entities study various issues: What we gain whether we are unemployed or not, even if we have properties or not. This will be what leads us to get or not, more credit to buy a house, a car or things that you need.
Tips when asking for a personal credit
Prior to the act of signing the contract, remember that personal loans are connected to a conditional path. That is why we will attend to:
- Refund time.
- Type of interest.
- Check other offers.
In some cases, other modalities can be very useful such as microcredit. The repayment time intervenes in interest. As a result, for a longer time, higher interest and more capital to be collected by the credit institution.
Let us also stop at factors such as commissions which are charged for opening the personal creditor, if it happened, for an intuitive cancellation.
They can change depending on the company so it is not enough to inform us about the characteristics of the different entities that could offer the credits.
As a final mention and conclusion for ourselves we have to think and answer this question deep inside of us; ¿Why should I need that credit? (Travel, home, business, emergency …).