Why Revenue-Based Financing Is Growing Globally, With Support From Square, Wells Fargo, and More
- Staff Writer
- Jul 26
- 3 min read
While traditional bank loans become harder to access and credit requirements grow tighter, one funding solution is proving to be both resilient and revolutionary: revenue-based financing, also commonly known as a merchant cash advance (MCA).
For those in the industry, this should come as no surprise. But the greater public is now learning of this product in its various structures.
Unlike conventional loans that require perfect credit and strict monthly payments, this model allows small businesses to repay as they earn, freeing them to grow without the pressure of fixed debt.
Recent moves by Square in the United Kingdom and Wells Fargo in the United States show how revenue-based financing is gaining global traction, and how it’s helping everyday entrepreneurs succeed faster, smarter, and with less risk. Of course, RBF is in many more countries than just the UK and US; it's in countries all over Europe, Asia, and Africa.
What Is Revenue-Based Financing?
Revenue-based financing (RBF) is a flexible funding option where a business receives upfront capital in exchange for a percentage of its future revenues, typically tied to daily or weekly card sales or average monthly deposits.
Key features:
No interest or compounding debt
No personal guarantees
A credit score often not required
No collateral
This makes it an ideal solution for retailers, restaurants, service providers, e-commerce, and other small businesses with fluctuating income or limited access to traditional credit.
Wells Fargo’s Grant-Funded RBF Success in the U.S.
In Chicago, Wells Fargo’s $20 million Open for Business Growth program is helping entrepreneurs grow through nonprofit intermediaries that offer revenue-based financing.
This program just launched in May, but already has a powerful example according to a Business Journals report: Japanese food startup Onigiri Kororin, which scaled its operations with a $210,000 revenue-based advance from nonprofit lender Allies for Community Business (A4CB). The capital helped the founders:
Move into a kitchen 3x larger
Hire more staff (now 25+ employees)
Prepare to expand to other U.S. cities
The result? More revenue, more jobs, and a thriving local business, all made possible by flexible, non-equity capital.
“The loan was transformative,” said co-founder Yuta Katsuyama.
Square Launches Cash Advance in the UK
Meanwhile, in the U.K., Square just launched Square Cash Advance, bringing revenue-based financing to its merchant ecosystem.
Available to eligible sellers using Square
Approved in just a few clicks, no paperwork
Repaid automatically from card sales
No credit impact and no fixed term
Retail business owner Michael Sayward, an early user, said Square Cash Advance gave him the confidence to grow without risk:
“I was raised to stay within my means… but Square’s cash advance let me grow knowing the repayment would flex with my sales.”
Square’s model mirrors classic MCA structures, but is integrated directly into their POS platform. That’s embedded lending at work, fast, seamless, and data-informed.
Why Businesses Are Embracing RBF
Across the globe, small and micro businesses are turning to revenue-based financing because it aligns with their real-world needs.
Top benefits for business owners:
Fast approvals
Predictable flat fees
Payments scale with performance
No dilution or loss of control
Use funds for marketing, inventory, staffing, and more
Unlike loans that penalize slow months or carry compounding interest, RBF respects the natural cash flow cycle of small businesses.
Wrap Up
Whether it’s a rice ball startup in Chicago or a boutique retailer in London, revenue-based financing is helping entrepreneurs scale operations, hire staff, and build better businesses on their terms.
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