Revenue-based finance cost calculator
Revenue-based finance is quoted as a flat fee, not an APR. A 6% fee sounds small, but if your sales repay it quickly the annualised cost is much higher. This calculator converts a flat fee, a revenue-share percentage and your monthly online revenue into a payback period and an approximate effective annualised cost, so you can compare an ecommerce advance properly against a term loan or invoice finance.
Director, FundBiz
Oliver leads FundBiz's specialty finance comparison and matching engine. With a background in UK commercial finance, he oversees lender partnerships, eligibility logic and post-decline routing.
Last reviewed: 27 June 2026
Work out your offer
- Total repayable
- £106,000
- Fee in pounds
- £6,000
- Monthly repayment
- £9,600
- Payback period
- 11 months
- Effective annualised cost
- ~13%
Approximate. The effective annualised cost assumes the balance amortises evenly with sales. Commercial finance is exempt from APR disclosure, so treat this as a sanity check, not a quoted rate.
The maths in plain English
Four numbers drive the cost:
- Total repayable is the advance times the fee. £100,000 at 6% repays £106,000.
- Monthly repayment is your monthly online revenue times the revenue share. £80,000 at a 12% share is £9,600.
- Payback period is total repayable divided by the monthly repayment. £106,000 over £9,600 is about 11 months.
- Effective annualised cost spreads the fee over the average outstanding life, which is roughly half the payback. A 6% fee over an 11-month payback annualises to around 13%.
The single most important point: the fee is fixed, but the annualised cost is not. The faster your sales repay the advance, the more that flat fee costs you in annualised terms.
Worked examples
| Advance | Fee | Revenue / share | Total repayable | Payback | Effective cost |
|---|---|---|---|---|---|
| £50,000 | 4% | £60,000 / 10% | £52,000 | 8.7 months | ~11% |
| £100,000 | 6% | £80,000 / 12% | £106,000 | 11 months | ~13% |
| £80,000 | 8% | £50,000 / 15% | £86,400 | 11.5 months | ~17% |
The headline fee alone does not tell you the cost. The 8% advance lands near a 17% effective cost while the 4% advance sits around 11%, and a faster revenue share on any of them would push the effective cost higher again by clearing the same fee in less time.
| Advance | Flat fee | Monthly revenue / share | Total repayable | Payback period | Effective annualised cost |
|---|---|---|---|---|---|
| £50,000 | 4% | £60,000 / 10% | £52,000 | 8.7 months | ~11% |
| £100,000 | 6% | £80,000 / 12% | £106,000 | 11.0 months | ~13% |
| £80,000 | 8% | £50,000 / 15% | £86,400 | 11.5 months | ~17% |
Source: FundBiz revenue-based finance cost worked examples
Effective annualised cost = flat fee x 24 / payback period in months, where the fee is spread over the average outstanding life (roughly half the payback for a revenue-share product that amortises with sales). Approximation for comparison only; commercial finance is exempt from APR disclosure.
View as plain-text Markdown
### Worked examples: revenue-based finance flat fee to approximate effective annualised cost | Advance | Flat fee | Monthly revenue / share | Total repayable | Payback period | Effective annualised cost | | --- | --- | --- | --- | --- | --- | | £50,000 | 4% | £60,000 / 10% | £52,000 | 8.7 months | ~11% | | £100,000 | 6% | £80,000 / 12% | £106,000 | 11.0 months | ~13% | | £80,000 | 8% | £50,000 / 15% | £86,400 | 11.5 months | ~17% | Source: FundBiz revenue-based finance cost worked examples Effective annualised cost = flat fee x 24 / payback period in months, where the fee is spread over the average outstanding life (roughly half the payback for a revenue-share product that amortises with sales). Approximation for comparison only; commercial finance is exempt from APR disclosure.
“These rows assume the revenue share holds steady, but it is a percentage of sales, so a strong month clears the advance faster than the table shows and pushes the effective annualised cost above it. The pound cost is fixed at the fee and never moves, so for a fast-turn inventory or ad-spend buy the better questions are what the advance costs in pounds and whether the daily revenue share still leaves enough margin to trade, not the annualised rate.”
FAQ
How is revenue-based finance priced?
As a single flat fee on the advance, disclosed at offer, not as an interest rate. A £100,000 advance at a 6% fee repays £106,000 in total. The fee does not change as you repay, which is why the annualised cost depends entirely on how fast your sales clear it.
Why does a fast payback make it more expensive?
Because you pay the same fixed fee over a shorter time. A 6% fee repaid in 3 months is the same 6% you would have paid over 12 months, but compressed, so the annualised cost is roughly four times higher. Strong sales clear the advance faster, which raises the effective annualised rate.
How does this compare to a term loan?
A term loan is quoted as an APR, often 6.9% to 26.9% for SME borrowing, with fixed monthly payments. Revenue-based finance trades a higher likely cost for speed, flexible repayment and underwriting on store data rather than accounts. Use the effective-cost figure here to compare the two on the same basis.
Related
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Last reviewed: 27 June 2026.