Royalty Capital Funding

We prepare you to review and consider all options, outlining the pros and cons of each and making recommendations as to which one is ideally suited for your business and its specific financial situation.

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ROYAL CAPITAL FUNDING TERMS

⇒ Loan Amounts

Minimum Investment $500,000

⇒ Loan Term:

Opportunistic capital invested for a portion of topline sales

⇒ Time To Fund:

4-6 weeks

⇒ Interest rates:

20% range- negotiable

WHEN ALTERNATIVE LENDING MAY BE THE BEST OPTION

Sometimes, a traditional lending product, whether it be a term loan, commercial lending vehicle or a line of credit, just isn’t the best option for a business that seriously needs capital. Because no two businesses are alike, it never makes sense to try and force a square peg into a round hole when it comes to finding just the right funding solution.

There are companies that need to think out of the box when it comes to finding the right capital solution for their business and that’s exactly what we help businesses do. Business Capital Consultants USA thoroughly analyzes our client’s financial situation, understanding their balance sheet and cash flow to determine the ideal funding solution for their unique financial situation. In many cases, incorporating royalty capital is the perfect answer for small businesses or startups that need cash but don’t want to secure a long-term loan or give up any equity.

Royalty-based capital funding is an alternative that companies can pursue that provides capital in exchange for a percentage of your business’ future revenue. Business Capital Consultants can help you determine whether this funding option is right for your business.

This option isn’t just for Shark Tank participants. Many companies have utilized royalty capital funding to raise the cash they need to fund their startup, growth, and overall operation. Companies that have very reliable and predictable revenue streams, online or service subscription business, high growth businesses, or new businesses with a large number of pre-orders are excellent candidates for royalty funding.

Royalty capital funding is an ideal capital option for the following:

  • Businesses that do not want to take on debt or offer equity in exchange for funding.
  • Companies with stable and predictable revenue streams.
  • Companies that want a bit more flexibility in their funding options.
  • New companies with high growth potential.
  • Companies that want a predetermined timeframe in which to satisfy the royalty.

Not sure if this is the right funding product for your business? Don’t worry, Business Capital Consultants provides extensive insight and understanding of the royalty funding process; your business does not have to go it alone. We prepare you to review and consider all options, outlining the pros and cons of each and making recommendations as to which one is ideally suited for your business and its specific financial situation. And, once the funding mechanism is in place, we remain by your side, helping you to make the right financial decisions and to see future financial opportunities.

The Pros and Cons of Royalty Capital Funding

Traditional lending solutions don’t work for some businesses.

Perhaps the company doesn’t meet the underwriting standards. Or maybe they do, but they can’t negotiate the terms that they want.

If that sounds like your situation, you shouldn’t try to make it work. Instead, you can seek out alternative funding sources like royalty capital.

Royalty capital funding is a financing method where you get capital in exchange for a slice of your future revenues. 

Of course, you’ll want to talk with an expert before you pursue royalty capital — both to understand if it’s right for your business and find lenders offering it. Business Capital Consultants can examine your financial situation and determine if royalty capital funding suits your business.

We also recommend reading our royalty funding pros and cons list below to better understand this form of financing before speaking with us. 

The Pros of Royalty Capital Funding

  • Can Help Lead to Other Financing Sources

The quick infusion of cash that royalty financing provides could be just what you need to boost your sales and improve your business finances. Getting other forms of funding will be much easier down the road.

  • No Debt or Equity

Debt means you owe someone money plus interest, and equity means someone has a say in your company’s operations. 

Fortunately, royalty capital involves neither. No debt means no extra liabilities on your balance sheet. No equity means you won’t have an outside investor advising you on how you run your business — not to mention fewer securities laws to deal with.

  • Negotiating For Better Cash Flows

In some cases, you may be able to negotiate a lag time between when you earn revenue and when you must pay out royalties. During this lag time, you can invest your savings back into your business to boost sales further.

You could also establish a grace period at the beginning of the deal where you can earn revenue without owing royalties. You’ll have extra time to kickstart sales, yet have your royalty funding in the back of your pocket.

Many investors are okay with this arrangement because the payment terms are better than equity. Under an equity agreement, investors don’t earn anything until they sell their shares of stock.

  • A Vote of Confidence In Your Business

It’s worth noting that investors giving you a royalty deal is a good sign that you’re doing something right. Investors sift through a lot of your financial data and think hard before agreeing to a royalty arrangement — they won’t do a deal that won’t get them paid.

The Cons of Royalty Capital Funding

  • May Be Difficult For Startups to Obtain

Stable revenue is a significant selling point for striking a royalty capital funding deal. Startups unable to demonstrate this data could have a tough time. You shouldn’t rule it out — you can leverage experts like Business Capital Consultants to find funding that works for you.

  • Can Be Expensive

Royalty deals can take a long time to pay off. Your arrangement could end up costing a lot more than another form of debt — especially if the royalty amount is high.

  • Doesn’t Work Well For Tight Profit Margins

If your business has tight profit margins, you need every dollar you can get. Royalty capital funding takes a bite out of that already-slim margin, making it tough to keep your business afloat.

Is Royalty Capital Funding Right For You?

Does your business have a strong track record of sales? Are you poised for fast future growth? If so, you should consider doing a royalty deal with an investor.

But it’s hard be sure that royalty capital is the way to go, especially since it’s not a conventional (and thus less understood) form of financing. Business Capital Consultants has a thorough understanding of this unique funding method — we’ll look at your financial situation, then weigh royalty capital against your other options. 

Should royalty capital be the best choice, we’ll serve as your partner by helping you find sources of this form of financing. Even after you strike a deal with investors, we’ll be by your side to help you seize future opportunities.

Schedule your free 30-minute consultation with Business Capital Consultants today.

Business Capital Consultants is here to help if you aren’t sure which short-term financing source is right for you. We’ll deal with the paperwork and phone calls for you so you can get the funding you need without wasting valuable time.

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