How Revenue-Based Financing Works for Law Firms
A complete guide to revenue-based financing for legal practices — how it works, who qualifies, and why it's transforming how law firms manage cash flow.
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Revenue-based financing (RBF) is rapidly becoming the preferred funding model for law firms that need capital without the rigidity of traditional bank loans. Unlike fixed monthly repayments, RBF ties your repayments directly to your firm's monthly revenue — meaning payments flex with your income.
How Does Revenue-Based Financing Work?
Your firm receives a lump sum of capital upfront. In return, you repay a small, fixed percentage of your monthly revenue — typically between 5% and 15% — until the balance is cleared. There are no compounding interest charges, no rigid installment schedules, and no surprises.
"When billing is strong, you pay more and clear the balance faster. When it's quieter, payments automatically reduce. It's funding that respects the reality of legal practice."
Why It Works for Law Firms
Law firms face uniquely unpredictable cash flow patterns. Settlement cycles can stretch for months. Contingency cases produce no revenue until resolution. Seasonal fluctuations in case intake create billing valleys. Revenue-based financing was designed for exactly this kind of variability.
Traditional lenders apply rigid monthly installments regardless of whether your firm had a strong month or a quiet one. RBF adapts automatically, removing the financial pressure that rigid loans create during lean periods.
Typical Terms and Eligibility
Most law firms can access between $25,000 and $750,000 through revenue-based financing. Terms typically run 6 to 18 months, with no personal guarantee required on most deals. Eligibility requires 12+ months of trading history and minimum monthly revenue of $25,000.