- 1AltCap California is a vetted partner lender on IBank's Small Business Loan Match site.
- 2AltCap describes costs as up to 7.5% of monthly revenue and a total cost of 1.4x to 1.5x.
- 3Its videos tell borrowers to ask about APR when comparing offers.
California's state-run loan matching site lists a revenue-based financing provider among its vetted lenders. The California Small Business Loan Match, operated by the California Infrastructure and Economic Development Bank (IBank), names partner small business lenders whose loans the state guarantees, and one of them is AltCap California.
How AltCap describes the cost
On the AltCap financing page, the company says revenue-based financing means paying up to 7.5% of monthly revenue, for a total cost of 1.4x to 1.5x. Its multi-part video education series breaks costs into two measures:
- Repayment cap: a multiple of the total amount lent, which sets the dollar amount to be repaid, or the total cost of capital.
- Repayment rate: the share of revenue used to repay the financing, or the holdback percentage.
The second video, a case study of a business called Juice Boost, reinforces that the repayment cap (the factor rate) and repayment rate (the holdback percentage) determine the cost. In the fourth and final video, AltCap tells borrowers to ask about APRs so they can compare with companies such as Square, Amazon, Stripe and Shopify.
How AltCap frames the product
The site says revenue-based financing is different from debt financing: interest is not paid on an outstanding balance and there are no fixed payments. Payments, it says, are "proportional to a firm's performance, offering a flexible, patient source of financing."
The lender appears on the state's Small Business Loan Match site.
Source reporting: deBanked.
