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RBF · Texas
Revenue-Based Financing in Texas
Short answer
Revenue-based financing for businesses in Texas should match the purpose of the money and the cash available for repayment. Compare written fees, payment dates, security and eligibility with the provider. Now Biz Fund can review your funding request; approval and timing depend on the funding partner.
From a Houston fabrication shop to a Rio Grande Valley produce distributor, Texas owners weigh revenue-based financing in a state with no personal income tax and, since 2025, a dedicated law for sales-based financing. Capital repaid as a fixed share of revenue until a set cap is reached, so payments rise and fall with sales.
Provider-specific; size to repayment capacityAmount to discuss
Provider-dependent; confirm availability of fundsFunding timing
Ask which personal and business credit checks applyCredit guideline
Check repayment cap, revenue share and any minimum paymentsTerm
Local funding context
Why Texas businesses consider revenue-based financing
Texas has the second-largest state economy in the country and several very different regional economies inside it. Houston runs on energy, petrochemicals, the port and the world’s largest medical complex; Dallas and Fort Worth on corporate headquarters, finance, logistics, aviation and defense; Austin on state government, the university and technology; San Antonio on the military, military medicine and tourism; and the border cities of El Paso and McAllen on cross-border manufacturing, trade and produce. West Texas adds oil, cotton and wind, and the whole state shares a construction boom that has run for more than a decade. Requests for revenue-based financing from Texas therefore range from a Ship Channel fabricator to a Frisco orthodontist to a Rio Grande Valley produce carrier.
Texas is a low-tax, low-regulation state for business. There is no personal income tax, and the state levies a franchise (margin) tax only on businesses above a revenue threshold, so most very small companies owe none. The statutory minimum wage tracks the federal rate, though market wages in the big metros and in trades such as trucking and construction run well above it. Commercial rents are moderate outside the core of Austin and the Dallas and Houston office districts, and land is plentiful, which keeps buildout and expansion costs lower than on either coast. The trade-offs are weather-related: extreme summer heat, Gulf hurricanes and flooding in Houston, hail across North Texas and the occasional severe winter storm that shuts businesses statewide for days.
Since September 2025 Texas has regulated commercial sales-based financing, the category that includes merchant cash advances and revenue-based financing. Under HB 700 (Finance Code chapter 398), providers and brokers of covered transactions under $1 million must register with the Office of Consumer Credit Commissioner by December 31, 2026 and give the business a standardized disclosure before signing; confessions of judgment in those contracts are unenforceable. Term loans, lines of credit and invoice factoring are outside that law, so for those products the discipline still has to come from the owner: ask every provider for the total repayment, an annualized cost, the term, the payment schedule and the prepayment terms in writing and compare offers side by side. Texas usury rules set ceilings for commercial loans, and federal credit-reporting, equal-credit and UCC lien rules apply as they do everywhere.
The SBA serves Texas through six district offices: Dallas-Fort Worth, Houston, San Antonio, El Paso, Lubbock for West Texas and Harlingen for the Lower Rio Grande Valley, which covers McAllen. Each works with SBA-approved lenders, a large network of Small Business Development Centers hosted by universities and community colleges, SCORE chapters and Women’s and Veterans Business Outreach Centers, and Texas’s large veteran population makes the SBA’s veteran-focused programs especially relevant around San Antonio, El Paso and Killeen. SBA 7(a) and 504 loans are originated by participating lenders rather than by the agency itself, and the state’s many small manufacturers, logistics companies and practices buying real estate or major equipment are the classic candidates for their longer terms.
Texas runs on several calendars at once. The Gulf Coast lives by hurricane season, which stretches from June to November and pushes contractors, restorers and insurers into their busiest stretch in the months after a storm. The Legislature meets only in odd-numbered years, so Austin fills with lobbyists and agency contractors from January to May every other year. Oil and gas activity in the Permian Basin and the Eagle Ford ripples outward into trucking, hospitality and equipment demand from Midland to Corpus Christi. The rodeo season in Houston, Fort Worth and San Antonio, the State Fair in Dallas each fall and football weekends from Lubbock to College Station all move restaurant, hotel and retail deposits, and the summer heat compresses outdoor work into early mornings from June through September.
Revenue-based financing in local practice. In Texas, cash-pay practices such as medspas and physical therapy use RBF for expansion, repaid as a share of collections; restaurants with strong delivery-platform and card revenue use a revenue share that eases during slow weeks. Manufacturers with direct-to-consumer channels use RBF for inventory; B2B manufacturers lean on factoring.
What to evaluate
- Underwriting emphasizes trailing revenue and deposit consistency
- Payments are structured around an agreed share of revenue
- Funding timing is set by the provider after approval
- The structure does not require giving up business equity
| Region | Signature sectors | Funding pattern |
|---|---|---|
| Houston and the Gulf Coast | Energy and oilfield services, petrochemicals, port logistics, healthcare | Receivables bridging and equipment financing for vendors to large operators; storm-recovery working capital |
| Dallas-Fort Worth | Corporate services, logistics and distribution, aviation and defense, healthcare, construction | Lines of credit for B2B firms; truck, trailer and precision-equipment financing; term loans for buildouts |
| Austin and San Antonio | Technology, state government, military and military medicine, tourism, food and beverage | Working capital around session and festival swings; equipment for restaurants, clinics and gyms |
| Border and West Texas | Cross-border manufacturing support, produce and freight, agriculture, regional healthcare | Refrigerated trailers and forklifts; factoring for freight and produce; ag and medical equipment loans |
| Period | What happens in Texas | Funding implication |
|---|---|---|
| January–March | Rodeo season in Fort Worth, San Antonio and Houston; Legislature in session in odd years; occasional ice storms | Hospitality deposits strong; contractors plan for spring; agency vendors watch session timing |
| April–June | Spring festivals statewide; construction and landscaping at full pace; hurricane season opens in June | Equipment and working-capital demand peaks; Gulf Coast businesses review insurance and reserves |
| July–September | Extreme heat compresses outdoor work; schools reopen in August; peak hurricane months | Outdoor trades borrow for equipment and crews; storm-related restoration work surges after any landfall |
| October–December | State Fair in Dallas, football season, cotton harvest on the South Plains, holiday retail | Inventory financing; carriers add trailers for peak freight; year-end equipment purchases |
Local rules and help
What to check in Texas before you apply
| Factor | Detail |
|---|---|
| State cost disclosure rule | HB 700 (since September 2025): standardized disclosures and registration for sales-based financing such as advances under $1 million; other products not covered |
| Where business liens are filed and searched | Texas Secretary of State (SOS UCC Portal) |
Checked October 15, 2026 against official sources: Texas Secretary of State (SOS UCC Portal). Confirm current rules before relying on them.
How it works
How revenue-based financing works
Revenue-based financing (RBF) advances a lump sum in exchange for a fixed percentage of future monthly revenue, remitted until the business has paid a predetermined cap, typically 1.1 to 1.5 times the advance. There is no fixed maturity: a strong sales month accelerates repayment, a weak one slows it. The structure was popularised by software and e-commerce investors and has spread to any Texas business with predictable, trackable revenue.
Providers underwrite from data rather than paperwork. Many connect directly to your bank account, payment processor, marketplace or subscription-billing platform to see trailing revenue, churn, seasonality and gross margin. The revenue share, commonly 3% to 10% of monthly receipts, is set so the cap is reached within a target window, usually 6 to 24 months, based on your recent run rate.
RBF is not equity: you give up no ownership and no board seat. It is also not a bank loan: there is no APR in the contract, though several states now require providers to disclose an estimated annual rate. For a Texas business the practical question is whether the revenue share leaves enough gross margin to fund operations while the cap is being paid down.
Qualification
Qualification guidelines for revenue-based financing in Texas
Confirm each requirement with the provider; no single item guarantees approval.
| Criterion | What to confirm | Why it matters |
|---|---|---|
| Monthly revenue | Document repayment capacity after existing obligations | Prepare supporting records and resolve the requirement before committing |
| Time in business | Ask whether the provider accepts your operating history | Requirements differ by product and business stage |
| Credit score | Ask what personal, business or customer credit review applies | A single score does not establish approval |
Secure eligibility check
Fast Funding Review
Share a few details about your Texas business and the revenue-based financing amount you have in mind to start a confidential, no-obligation review. This step does not use a hard credit pull.
- No hard credit pull to apply
- Review and funding times vary by provider
- 5+ years in the industry
- Encrypted, private document handling
Cost structure
Revenue-based financing cost: caps, revenue share and a $204,000 example
Check the definition of revenue, remittance percentage, repayment cap and any minimum payments. Ask how refunds, seasonality and reconciliation are handled. A fixed cap can have a very different annualized cost depending on how quickly the business remits it.
Hypothetical example for Texas: at the stated inputs, $204,000 produces a total remittance between $224,400 and $306,000. An assumed collection period produces average payments between $18,700 and $25,500; actual revenue-linked collections can differ. Use the interactive estimator to test revenue and collection assumptions rather than treating an average as a fixed payment.
Build the same comparison from a dated written offer. Include amounts deducted before funding, payment dates, additional charges and any balance due at the end. Test the cash remaining in a weaker month before choosing an amount. Provider approval and a manageable payment are separate questions.
Payment estimator
Estimate revenue-based financing payments for a Texas business
Illustrative revenue-based financing figures for $204,000 using hypothetical rate assumptions. Actual offers depend on underwriting and the funding partner.
$22,100 per month (assumed average) and $265,200 in total payback (1.30x; assumed 12 months; actual payments vary with revenue).
Hypothetical figures using the stated term or collection period. Fees are excluded. Revenue-based amounts are averages over an assumed period, not fixed payments.
| Scenario | Estimated payment | Total payback / customer settlement | Basis |
|---|---|---|---|
| Lower scenario input | $18,700 / month (assumed average) | $224,400 | 1.10x; assumed 12 months; actual payments vary with revenue |
| Midpoint | $22,100 / month (assumed average) | $265,200 | 1.30x; assumed 12 months; actual payments vary with revenue |
| Higher scenario input | $25,500 / month (assumed average) | $306,000 | 1.50x; assumed 12 months; actual payments vary with revenue |
Fit
Where revenue-based financing fits for Texas businesses
Best uses
- Inventory ahead of a peak season
- Paid advertising with a measured return
- Launching a new product line or location
- Hiring sales or delivery staff ahead of demand
- Bridging a seasonal trough without a fixed payment
- Growth capital without giving up equity
Watch-outs
- Fast growth means faster, costlier repayment on an annualised basis
- Caps are fixed regardless of how quickly you repay
- Some providers require read-only access to sales platforms
- Revenue share is taken from gross receipts, before expenses
- Not available to businesses without trackable, recurring revenue
Best for: E-commerce, subscription and seasonal businesses that want payments to flex with sales.
Documents
Data and documents for a revenue-based financing application
Prepare the records requested by the provider. Complete documents help the review but do not guarantee a decision or funding date.
- 6 to 12 months of business bank statements or a live bank connection
- Read-only access to your payment processor, marketplace or subscription platform
- Government-issued ID for owners
- Formation documents and EIN
- A summary of existing financing and remittance schedules
- Year-to-date profit-and-loss for larger amounts
Timeline
The revenue-based financing timeline
Receive a term sheet
Ask the provider for its document checklist and submit complete, consistent records through the protected process. Do not assume a particular amount qualifies for reduced documentation.
Model the remittance
The provider reviews the business, repayment capacity and any product-specific invoices, assets or security. Ask which checks remain outstanding and when a decision can be expected.
Sign and set up remittance
Review the written terms, costs and approval conditions before signing. Confirm any security, guarantees, deposit and insurance requirements.
Repay to the cap
Confirm when funds are available, who receives them and when the first payment is due. Approval, disbursement and cleared funds are different stages.
Alternatives
Alternatives to revenue-based financing in Texas
Compare the products a Texas business is most likely to be offered alongside revenue-based financing; each guide below sets out structure, timing, credit guidelines and uses side by side.
Line of credit vs revenue-based financingA line of credit is cheaper for businesses that can repay draws quickly and qualify on credit.Merchant cash advance vs revenue-based financingAn MCA funds faster and accepts weaker files, but usually costs more and remits daily.Revenue-based financing vs working capitalA working-capital loan has a fixed schedule and a known end date, which some owners prefer.Invoice factoring vs revenue-based financingFactoring suits invoiced B2B revenue; RBF suits card, platform and subscription revenue.
Common questions
Revenue-based financing in Texas: what owners ask
How is revenue-based financing different from an MCA?
The labels can overlap. Compare how payments are calculated, whether they adjust with actual revenue, the total repayment obligation, fees, reconciliation rights and guarantees. Do not assume every revenue-based offer has a particular payment frequency or lower cost than an MCA.
How quickly may revenue-based financing close?
There is no single funding deadline for every provider. Ask for the expected review and disbursement dates after the file has been assessed, including any outstanding documents, verification and signing conditions. Do not commit to an expense on the assumption that an advertised fastest time applies to your request.
Is revenue-based financing only for software companies?
No single industry defines every revenue-based product. Some providers specialize in software or recurring-revenue businesses; others consider different business models. Confirm the provider's industry, revenue-history and repayment requirements for the actual offer.
Does Texas require providers to disclose the cost of revenue-based financing?
Partly. Since September 2025, Texas HB 700 requires providers and brokers of commercial sales-based financing, such as merchant cash advances, to register with the state and give a standardized disclosure on covered transactions under $1 million. Term loans, lines of credit and factoring are not covered, so for those ask each provider for the total repayment amount, an annualized cost, the term, the payment frequency and prepayment terms in writing and compare offers on that basis.
Are there Texas programs that work alongside revenue-based financing?
The SBA serves Texas through district offices in Dallas/Fort Worth, Houston, San Antonio, El Paso, Lubbock for West Texas and Harlingen for the Lower Rio Grande Valley, each with Small Business Development Centers and SCORE chapters that help package loan requests. The Texas Economic Development Bank and local economic development corporations funded by sales tax run incentive and loan programs aimed at job creation, usually slower and narrower than private financing but useful on larger projects.
Which Texas cities have a dedicated revenue-based financing guide?
Houston, Dallas, San Antonio, Austin, Fort Worth, El Paso, Arlington, Plano, Irving, Frisco, McAllen and Lubbock each have a local page linked below. Businesses anywhere in Texas, from Amarillo to Brownsville and Midland to Beaumont, can apply through the same process: a short application, bank statements and a no-obligation comparison of offers from funding partners.
Does Texas’s lack of a personal income tax change how revenue-based financing is underwritten?
Not directly. Lenders underwrite from bank statements and cash flow, and the state’s franchise tax on businesses above a revenue threshold is one of the expenses they see. What the tax structure does change is margins: many Texas businesses keep more of their revenue than peers in high-tax states, which can support a larger payment.
Are Texas energy-sector suppliers treated differently for revenue-based financing?
Not formally, but funding partners know the oilfield cycle. Service companies, haulers and fabricators in the Permian and Eagle Ford show deposits that follow rig counts and commodity prices, so underwriters read a full year and favor equipment financing against titled assets and factoring of operator invoices over fixed daily debits.
How is revenue-based financing different from a merchant cash advance?
Both remit from revenue, but RBF is usually sized from total monthly revenue with a monthly or weekly share, longer expected repayment and platform-based underwriting, while an MCA is typically smaller, daily-remitted and priced from bank statements alone. Caps and factors overlap at the low end.
How quickly does revenue-based financing fund in Texas?
Timing depends on the provider, complete documentation, verification and any closing requirements. Ask what must happen before money is available; an initial response is not a funding commitment.
What revenue share should I expect?
The agreement defines the revenue share and any minimum payments or reconciliation rules. Compare those terms with your normal and weaker-month revenue; the calculator’s inputs are illustrative.
Is Now Biz Fund a revenue-based financing provider?
No. We are funding specialists with 5+ years in the industry. We match Texas businesses with RBF partners, compare caps, shares and fees across offers and explain how each would behave over your actual seasonal pattern.