Mastering Revenue-Based Funding:
Prepare Your Business Like a Pro

Getting approved for startup funding isn’t always easy—especially when traditional loans require years of credit history, secure collaterals, and have rigid terms. That’s where revenue-based funding steps in. Of course, just like any other financing route, the approval for this depends on how well-prepared your business is.

In this blog we will guide you through the practical ways to prepare your company and increase your chances of getting approved.

What is Revenue-Based Funding?

Revenue-based funding is a flexible form of startup funding where repayments are tied to a percentage of your monthly revenue. This model is especially helpful for high-growth businesses that may not qualify for traditional small business loans in India.

Unlike venture capital, you don’t give away equity. Unlike bank loans, you’re not locked into fixed monthly payments. Instead, you repay based on your earnings—giving you breathing room during slower months.

Key Metrics That Lenders Look for

Before applying for funding, make sure your business checks the right boxes. Lenders often assess several performance indicators before granting e-commerce funding.

Here are some key metrics to track:

• Monthly Recurring Revenue (MRR):
  Consistent income indicates healthy cash flow
• Customer Retention Rate:
  High retention means reliable revenue
• Gross Margins:
  Higher margins reflect better profitability
• Revenue Growth Rate:
  Upward trends signal scalability

Financial Express reported that startups, especially those dealing in eCommerce and B2B SaaS (software-as-a-service) industries, were heavily dependent on revenue-based financing in 2024 with a projected upwards trend in 2025.

Here are some practices which will help you secure revenue-based funding for your business faster.

Organize Your Financial Documents

One of the biggest delays in the loan approval process is missing paperwork. Before applying, gather all key documents in one place.

Essentials include:

• Last 12 months of bank statements
• Profit and loss statements
• Business tax returns
• Balance sheets

Make sure everything is up-to-date. Organized records show lenders you’re financially responsible.

Highlight Predictable Revenue Streams

Lenders love predictability. If you have recurring revenue (e.g., subscriptions), highlight that. Even seasonal businesses can show predictability if you track trends over years.

To strengthen your application:

• Segment revenue by product or channel
• Show customer loyalty stats
• Display retention rates

This makes your business appear more stable and fund-worthy.

Improve Your Business Credit Score

Even though revenue-based financing focuses on revenue, some providers still review your business credit score. A higher score can fast-track your application.

Ways to improve it:

• Pay vendors on time
• Keep credit utilization low
• Correct errors in credit reports

A strong credit score adds an extra layer of trust, making you a more attractive candidate for funding.

Be Transparent With Your Goals

Funding providers want to know how you’ll use the capital. Whether it’s inventory, hiring, or marketing, transparency builds trust.

In your application:

• Outline your use of funds
• Show how it supports growth
• Include realistic ROI expectations

This can significantly increase your chances of getting approved.

Build a Consistent Sales Pipeline

Revenue-based funders prefer businesses with steady incoming revenue. A well-maintained sales funnel proves you’re not reliant on one-off spikes.

Here’s how to improve this:

• Use CRM tools to track leads
• Set monthly sales targets
• Nurture long-term customer relationships

Consistency signals to funders that repayments won’t be a struggle.

Showcase Customer Success Stories

Customer testimonials and success stories can give you an edge. They show your product or service delivers value, which hints at long-term revenue.

How to leverage them:

• Add short quotes from loyal customers
• Share growth stories of clients
• Include before-and-after case studies

It’s social proof with financial implications.

A Final Checklist

Before hitting “submit” on your application, make sure you:

• Organize all financial records
• Prepare a revenue report
• Document your business goals
• Get your credit score in shape

Double-check all your numbers and ensure consistency across documents. A well-prepared application gets noticed.

Ready to Unlock Growth with Smart Funding?

Preparing for startup funding through revenue-based models requires more than just revenue. It’s about showing consistency, responsibility, and a clear growth vision.

Whether you’re navigating the loan approval process or exploring e-commerce funding options, the right preparation can fast-track your access to capital. Flexible models like revenue-based financing are reshaping how businesses scale in today’s market.

At Capital by Shipyaari, we help founders take the next big leap—with fast, flexible and founder-friendly funding options. Let us help you turn your vision into growth!