A Commentary and Comparison of Liberis
Liberis is a company that provides funding solutions to small businesses. They offer a revenue-based finance product that provides businesses with quick and easy access to capital. This product is flexible and allows businesses to pay back the funding as they generate revenue, making it a less risky option than traditional loans.
But how does this compare to the business loans and funding available with us?
A Revenue-Based Finance Provider
Liberis is a financial technology company that specialises in providing revenue-based finance to small businesses. This funding model offers a flexible and less risky alternative to more traditional lending products. Another way of understanding this type of finance is merchant cash advances.
So, What is Revenue-Based Finance?
Revenue-based finance is a type of funding where a business receives an upfront investment in exchange for a percentage of its future revenue. This percentage, known as the revenue share, is typically fixed for a predetermined period.
How Does It Work with Liberis?
When a small business partners with Liberis, the company assesses the business’s financial health and growth potential. Based on this evaluation, Liberis provides a lump sum investment. The business then uses this capital to fuel growth, expand operations, or invest in new projects.
As the business generates revenue, a portion of that revenue is automatically paid back to Liberis according to the agreed-upon revenue share. This means that the more successful the business becomes, the more it repays. This model aligns the interests of both the business and Liberis, as both parties benefit from the company’s growth.
Are There Advantages of This Model?
With Liberis, some of the benefits, arguably, include:
- Flexibility: No fixed repayment schedule, making it easier to manage cash flow.
- No Personal Guarantees: Typically, there’s no requirement for the business owner to personally guarantee the loan.
- Growth-Oriented: The funding model encourages business growth and expansion.
- Less Risk: Compared to traditional loans, revenue-based finance offers a lower risk profile for businesses.
By offering revenue-based finance, Liberis aims to empower small businesses by providing them with the capital they need to thrive and succeed.
The Considerations
While revenue-based finance offers a flexible and less risky funding option for many businesses, there are several factors to consider before entering into such an agreement:
1. Revenue Share
- Percentage: The percentage of your revenue that you’ll pay back can vary widely. A higher revenue share might mean a larger upfront investment, but it also means you’ll be paying more over time.
- Term: Understand the duration of the revenue share agreement. Longer terms can lead to higher overall costs.
2. Valuation
- Business Value: The valuation placed on your business will significantly impact the terms of the agreement. A higher valuation can lead to more favorable terms.
- Growth Projections: The provider will likely consider your projected revenue growth when determining the terms.
3. Dilution
- Ownership: Revenue-based finance can dilute your ownership stake in the company. This is because the provider essentially becomes a part-owner.
4. Flexibility
- Repayments: While revenue-based finance offers flexible repayments, it’s important to understand the terms of the agreement. Some providers may have minimum repayment requirements or restrictions on how you can use the funds.
5. Exit Strategy
- Buyback Options: Consider whether the agreement includes options for you to buy back the provider’s stake in your company at a later date.
6. Hidden Costs
- Fees: Be aware of any additional fees or charges that may be associated with the agreement, such as origination fees or late payment penalties.
7. Impact on Future Fundraising
- Investor Perception: Revenue-based finance can sometimes make it more challenging to raise future funding from traditional investors.
It’s essential to carefully review the terms of any revenue-based finance agreement and consult with a financial advisor to ensure it aligns with your business goals and financial situation.
How Do We Compare
In comparison, we offer a range of financial services to businesses in the UK. These services include bridging loans, business loans, merchant cash advances, commercial mortgages, business banking, and card machines. Our business loan value stretches up to £50 million, depending on the product, and we have a dedicated team to help businesses find the right financial solution.
While we are both companies that offer financial solutions to businesses. Liberis seems to focus on providing funding to small businesses specifically whereas we at AptPayment offers a wider range of financial services, providing business with more choice.
How We Can Help You
At AptPayment we pride ourselves on offering the following for our customers:
- Comprehensive Financial Solutions: We offer a variety of financial products, including bridging loans, business loans, merchant cash advances, commercial mortgages, business banking, and card machines. This means we can help your business find a solution tailored to your specific needs.
- Flexible Loan Options: Our bridging loans and business loans provide quick access to capital for various purposes, such as property purchases, business expansion, or working capital.
- Payment Processing Solutions: Our card machines and merchant cash advance services can help your business streamline its payment processing, potentially increasing sales.
- Dedicated Support: Our dedicated team can assist businesses in finding the right financial solution and navigating the application process.
If you would like to learn more about our lending options, speak to our team today at 020 3103 0022 or send us an email at info@aptpayment.co.uk.
* Image by wirestock on Freepik
