AFO · Head-to-head
Both share an economic shape — capital advanced against future revenue, repaid as a percentage of revenue rather than fixed instalments. The difference is in tenor and cap. RBF is short-term (typically 12–24 months) with a fixed multiple cap (1.2–1.5x the advance). Royalty financing is medium-to-long-term (7–10 years or a 2–4x multiple cap) and tied to a specific product or revenue stream rather than overall company sales.
Side by side
The matrix below pulls directly from the catalog. Each row shows the same data point across both programs so you can spot the differences at a glance.
| Attribute | Revenue-Based Financing (RBF) | Royalty Financing |
|---|---|---|
| Capital type | Revenue-based financing | Royalty financing |
| Family | Alternative structures | Alternative structures |
| Size range | $50,000 — $5,000,000 | $250,000 — $10,000,000 |
| Typical cost | Fixed multiple on the advance, typically 1.2–1.5x. Effective APR varies with repayment speed. | Royalty 2–8% of revenue with a 2–4x cap on the original advance, or a sunset after 7–10 years. |
| Speed to close | Days to weeks | Months |
| Eligibility | Recurring-revenue business (SaaS, e-commerce, subscription) with at least six months of consistent monthly revenue. No personal guarantee, no dilution. | Product business with high gross margin and a clear revenue trajectory. Royalty rate is set against the use of proceeds and the addressable market. |
| Use of proceeds | Working capital, Expansion | Expansion, R&D / innovation |
| Status | Live — self-serve | Coming soon |
Choosing between them
Each side describes the scenarios where the program is the stronger fit. Most real-world deals end up in the “in common” section below — neither/nor.
When to choose
Pick RBF when the business has consistent recurring revenue (SaaS, subscription, e-commerce) and the need is short-term working-capital or marketing-spend. The 1.2–1.5x cap is paid back in 12–24 months and the variable repayment matches the revenue ramp. Best fit when revenue is predictable and the use of proceeds will lift revenue itself.
When to choose
Pick royalty financing when the business is a product company with strong gross margins and a clear product-specific revenue trajectory. Longer tenor (7–10 years) and a 2–4x cap mean the absolute cost is higher than RBF, but the longer horizon matches product-development and market-entry cycles where the revenue lift takes years rather than months to materialize.
Neither dilutes equity, neither requires a personal guarantee, and both have variable repayment matching revenue. They sit in the same bucket of "alternative structures" because they share that DNA — but the use cases rarely overlap. The CPA models the effective APR of each before commitment; the implied cost of RBF when revenue scales fast can exceed what royalty would have charged over a longer horizon.
The CPA can look at your specific situation and tell you in one twenty-minute call which program (or stack) is the right structure — and what providers will want to see before the first conversation.