A revenue-based funding offer arrives with two numbers - a fee and a remittance percentage - and neither of them tells you whether taking the money is a good idea. The fee tells you what the capital costs. It does not tell you what the capital earns, or what withholding a slice of every sale does to the cash in your account. This calculator runs both versions of your store, with and without the advance, and reports the difference on three lenses: profit, cash, and margin.
Profit: does the capital earn more than its fee?
On the P&L, the only cost of a revenue-based advance is the fee. Repaying the principal is a cash movement, not an expense. So the profit question is simple: does the money you deploy generate more gross profit than the fee, after any spend it takes to generate it? Ad spend is an expense, so an advance deployed into ads needs a ROAS of at least (1 + fee) / gross margin to break even. Inventory bought at cost is already inside your gross margin, so its break-even is a sell-through rate: (1 + fee) x (1 - gross margin). Working capital held as a buffer earns nothing, and simply costs the fee.
Cash: the squeeze a profitable advance can still cause
Remittance comes off the top of every sale before you see the money. If the capital generates its return over a few months but the lender keeps withholding after the uplift has faded, there is a stretch where you have less cash than you would have had without the advance. That is the cash trough. It is common with inventory deployments, where the stock is paid for on day one and the remittance starts immediately, and with ad deployments where the ROAS is good but the payback outlasts the campaign. A trough is not a reason to refuse an advance, but it is a number you need to be able to absorb.
Margin: what leaves the P&L and what leaves the bank
While the balance is outstanding, the remittance percentage is the share of every sale that leaves your account before you see it. That is a cash diversion, not a P&L expense: a store running 20% net margin with a 10% remittance still reports close to 20% on the P&L, because only the fee portion of each remittance is a cost. The rest is principal, which is a cash movement. What changes is the cash margin - the money actually left over each month - which does fall by the full remittance percentage until the advance clears, unless the deployed capital lifts revenue enough to offset it. The calculator reports both: net margin during the repayment window, and the revenue diverted to the lender.
Modelling assumptions worth knowing
The model holds baseline revenue and operating costs flat, deploys capital evenly over the months you specify, and assumes the uplift stops when the deployment ends. Inventory is bought outright on day one; unsold stock is treated as sunk cash for the horizon, not as an asset. The fee is recognised pro-rata with remittances. Real advances add origination fees, minimum remittances, and true-up clauses, so treat the output as a decision aid and read the term sheet for the rest.
See It on Your Real Numbers
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