Revenue-Based Funding in NYC: How It Works and Who Qualifies

Revenue-based funding is capital priced and repaid against what a business actually brings in, rather than against collateral. For a New York City business — where the asset most lenders want to see is usually a building nobody here owns — that distinction is the whole point.

Byzfunder is headquartered in New York and funds businesses directly, from our own balance sheet. We have funded over $2B to more than 35,000 businesses since 2019.

What revenue-based funding actually means

The term covers a few different structures, and they are not interchangeable. Two matter here.

A merchant cash advance is a purchase of a portion of your future receivables at a fixed factor rate. It is not a loan and it carries no APR, because it is not interest-bearing — it is a sale. Repayment is a fixed weekly debit, taken automatically, and the amount is agreed before you sign. You know the figure and the day before you commit.

ByzFlex is revenue-based revolving capital. It is not a line of credit. You request capital, use it, and reuse it as it is repaid. It suits a gap that recurs — a seasonal swing, a slow-paying customer base, a lease cycle — rather than a single one-time need.

A term loan is the third option and the simplest: fixed amount, fixed schedule, for a project with a known cost. Term loans are advertised by Byzfunder and fulfilled through our affiliated Byzwash entity.

Why NYC businesses end up here

New York City has a specific combination of conditions that pushes healthy businesses toward revenue-based capital.

Rent is front-loaded and large. Commercial leases in the five boroughs commonly want a substantial security deposit or a good-guy clause backed by months of rent. That capital leaves the business before the location earns anything.

Most NYC operators do not own real estate. The traditional small business loan is secured by property. A Manhattan restaurant group, a Brooklyn contractor, a Queens distributor and a Bronx clinic can all be profitable and own nothing a bank wants as collateral.

Receivables run long in B2B. If your customers are other New York businesses, institutions or agencies, net 45 and net 60 are normal and net 90 happens.

Costs are higher per dollar of revenue. Labour, insurance, delivery and compliance all cost more here, which compresses the buffer a business can build from profit alone.

None of these are signs of a weak business. They are the operating conditions of the city, and they are exactly why deposit history is the fairer measure than a balance sheet.

New York disclosure law — what you are entitled to see

New York requires standardised commercial financing disclosures, administered by the Department of Financial Services. Any provider offering commercial financing to a New York business must give those disclosures at the time of the offer, including an APR-equivalent figure and the other key terms, so that different offers can be compared on the same basis. Ask your provider which disclosure form applies to your offer.

This matters practically. Before New York and California introduced these rules, comparing a factor rate against an interest rate was genuinely difficult, and some providers relied on that. You are now entitled to a like-for-like figure before you sign, from anyone funding you here.

Two things worth doing with that right:

1. Read the disclosure before you sign, not after. It is produced at the offer stage for exactly this reason.
2. Compare the same line across offers. The APR-equivalent and the total repayment amount are the two numbers that make offers comparable.

If a provider is reluctant to put the disclosure in front of you, that tells you something.

Who qualifies

• Business deposits. Typically about $20,000 a month or more, read across three to six months of statements.
• Credit. A 525 FICO floor for an MCA, 550 for ByzFlex. It is one input among several, not a pass mark on its own.
• A US-based business with a business bank account.
• Time in business. Longer helps. The deposit record carries more weight than the founding date.

Every file is underwritten on its own merits. Approval is never promised, and we do not quote an amount before reading the statements.

What NYC businesses use it for

• Covering a payroll week when a large customer's accounts payable runs late.
• Buying inventory ahead of a season — Q4 retail, summer in food service, the construction window.
• A build-out or a second location, where the landlord wants money long before the doors open.
• Bridging a long receivable on institutional or agency work.
• Taking a job that is bigger than the bank line, which is the most common one.

How it compares

A bank term loan is cheaper if you qualify and can wait. For a business with no real estate and a six-week need, that is often two reasons it does not fit.

Invoice factoring converts a specific invoice you have already issued, and the factor usually verifies it with your customer. Reasonable for some businesses; a real cost if that customer relationship is one you manage closely.

Revenue-based capital is not tied to one invoice, involves no contact with your customers, and funds on deposit history. It is generally faster and generally more expensive than a bank loan. Which of those two facts matters more depends entirely on what you are funding and when.

What you will need

Three to six months of business bank statements, a completed application, and basic business details. A complete file can fund in as little as 24 hours.

Frequently asked questions

Is revenue-based funding a loan? A merchant cash advance is not — it is a purchase of future receivables at a fixed factor rate, with no APR. A term loan is a loan. ByzFlex is revenue-based revolving capital. The New York disclosure gives you an APR-equivalent for comparison regardless of the structure.

Does the payment change when revenue dips? No. The weekly debit on an MCA is fixed and agreed before funding. Size it against a slow week, not a strong one.

Do I need collateral or New York real estate? No. That is the core reason this structure exists for city businesses.

I was declined by my bank. Does that matter here? It is why most of our customers are here. A thin balance sheet and no property read badly to a bank and say nothing about whether a business collects.

What does paying off early cost? Paying off early earns a 2.99% discount on our paper. Ask for the exact figure before you sign.

Ready to apply?

If the gap is six weeks and the bank's answer is six weeks away, timing matters more than structure. Start an application and ask for the New York disclosure before you sign anything.