Repayment is a share of turnover, so the rail must be variable
The whole premise is that repayment flexes with the business: a good month pays more, a lean month pays less. A fixed Direct Debit cannot express that. The rail has to be as variable as the repayment.
A variable product needs a variable rail
Revenue-based finance repays as an agreed percentage of turnover, which means the amount changes every cycle. That is the point of the product and the reason businesses choose it.
A fixed recurring rail works against the product. Set a fixed Direct Debit and you have recreated a term loan; the flexibility the business was sold is gone.
You also need to reconcile each variable collection against the facility and the turnover it was based on, so both sides agree the repayment was right.
The payment mix that fits
Not one rail. The two to four that match how money actually moves here.
Collect an agreed share of turnover each cycle, variable by design, within a limit the business set.
Reconcile each collection against the facility and the turnover it was based on.
Your flow of funds, orchestrated
Repayment collects over commercial VRP as an agreed share of turnover, a different amount each cycle, within a limit the business authorised. Each collection reconciles against the facility in a settlement account on one ledger, tied to the turnover it was based on, so both sides can see the repayment followed the formula. The advance itself is paid out over Faster Payments.
Every book moves money differently. We map your flow of funds and quote one integration across the rails that fit.
Related
Payments for revenue-based finance: FAQs
Because Direct Debit suits a fixed or pre-notified amount, and revenue-based repayment changes every cycle with turnover. Commercial VRP collects a variable amount within agreed limits, which fits the product.
The business sets a commercial VRP consent with a maximum, and each collection is a share of turnover within that limit, reconciled against the facility so both sides agree it was right.
Yes, the consent belongs to the business and can be revoked, which is part of the transparency of the rail.
Tell us how you get paid
Send us the mix of payments you take and make, and we will quote one integration across the rails that fit, priced on your volume.