Ruroc, an extreme sport brand that has created an integrated goggle/mask/helmut perfect for boarding, skiing and mountain biking, just closed its “revenue loan” campaign on Crowd2Fund. Crowd2Fund, an FCA regulated crowdfunding platform, is an innovator in the investment crowdfunding space having created a new investment vehicle with “Revenue Loans”.
There are many profitable businesses that require expansion capital but their seasonal revenue makes it difficult to use traditional bank financing. The revenue loan ties investor returns to the seasonal revenue variations. The borrowing business repays the loan as a percentage of company revenue, so no fixed monthly repayments. Perfect for businesses that need the flexibility. Investors are probably capturing a slightly higher return overall because they are willing to accept variations in the repayment process. Ruroc is a perfect example of thriving business that needs growth capital to migrate its product line into non-seasonal purchases. The company generated top-line revenue of over £1 million and is EBITDA positive.
Ruroc sought a £150,000 (it closed at £167,000) which was easily financed during a 30 day crowdfunding campaign on Crowd2Fund – one that gained exposure to “over 12 million people”, according to a UKBusiness Angels Association.
“Crowd2Fund’s revenue loan was a massive attraction for us as we are a seasonal business and this offers a much easier solution than making fixed monthly repayments. It is also a great way to access necessary funds in a short period of time, especially as the banks are often out of touch with how businesses operate. We needed to access funds at a good rate without the timely and bureaucratic process of using a bank. Happily, we found that Crowd2Fund not only offered the right product and rates, but that they were also a platform offering a unique way to market and grow our army of ambassadors.”
Rees, who was not aware of the financing option until he encountered Crowd2Fund, continued to explain the Revenue Loan allowed the firm to raise capital without giving up equity – something the owners were not inclined to do since they are growing at a healthy clip and generating net income.
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