Success Through Alternative Capital (STAC)
A Powerful Revenue-based financing initiative for
small businesses
Expanding Small Business Financing Capabilities
We’ve collaborated with Startup Tucson, Common Future, and their in-house investment entity, Community Credit Lab, to launch a new business financing initiative, Success Through Alternative Capital (STAC), which aims to help businesses without adequate collateral or assets to qualify for traditional loans.
STAC is designed as revenue-based financing (RBF), allowing small businesses to pledge future revenues for an advance of financial capital. Payments can vary depending on how well a business does and its gross revenues after receiving funding. Businesses have higher payments when they are generating more revenues and lower payments when they are generating less revenues, an arrangement that can be especially useful for seasonal businesses.
This new initiative comes after years of serving business owners with credit challenges who sought different financing options, beyond fixed-term loans. Where typical credit scores might instantly disqualify otherwise strong businesses, CIC sought a new way forward aiming to marry education and access to capital for the community.
How Does Revenue-Based Financing Work?
Frequently Asked Questions
Revenue-Based financing allows a business to pledge future revenues for an advance of financial capital. This funding method is non-dilutive, which means you keep all your ownership.
The business pays back the funding they received (the amount of purchased revenue) plus a fixed fee (discounted amount).
Revenue-Based Financing (RBF) does not use traditional lending methods, like requiring assets (your car/home) as collateral, or equity (selling part of your business) and repayment is flexible. RBF eligibility is determined by looking at the business revenues. The business owner pays back the funding they received (the amount of purchased revenue) plus a fixed fee (discounted amount) over time based on the cash flow of the business.
RBF repayments are variable and fluctuate based on revenues. Businesses have higher payments when they are generating more revenues and lower payments when they are generating less revenue, an arrangement that can be especially useful for seasonal businesses.
With term loans, business owners are obligated to make the same payment amount each month whether the business is making money or not. With RBF, the payment amount fluctuates with your cashflow.
Term Loans VS Revenue-Based Financing
Loans from Traditional Lenders
- Fixed Payments
- Interest
- Collateral
- Credit checks
Revenue-Based financing
- Quick access to capital
- Variable payments
- No credit checks
- No collateral or a personal guarantee
- No ownership dilution
INTERESTED in participating?
Let us know if you would like to find out more information about revenue-based financing (RBF) for your business.
Powered By Partnership
Startup Tucson was founded in 2012 on the heels of one of the first Startup Weekends in Tucson. Since that time, the innovation community has grown tremendously with more funding, support organizations, accelerators, and incubators popping up every year.
Startup Tucson has continued to serve as an advocate, educator, and connector for entrepreneurs. We serve over 3,000 entrepreneurs each year with over 300 active members in our network membership. Our alumni have brought over 44 million dollars of investment and over 400 new jobs in the short years since our founding.
Founded in 2001, Common Future is building a future where all people — no matter their race and class — have power, choice, and ownership over the economy.
As a Black-led, multiracial organization, our diverse team of strategists, community organizers, financial activists, and policy enthusiasts provides capital, operational support, and strategic partnership to budding solutions addressing racial and economic injustice. To advance racial and economic equity, Common Future incubates, co-creates, and funds field-defining initiatives and influences key sectors. We collaborate with leaders who have the imagination and courage to rethink our economy. We bring initiatives that model how to build wealth and power in excluded communities to life.
Ned, a financial technology platform that powers end-to-end revenue-based financing (RBF), offers a flexible capital product that’s easier on businesses, and streamlines paperwork and compliance for lenders.
Ned enables any organization to spin up their capital offering in minutes, with out-of-box integrations and easy-to-use qualification technology. Where credit difficulties disqualify a business owner, Ned’s revenue-based approach to underwriting and repayment provides a path forward that’s fast and fair.