Insights
When should you move off revenue-based lending?
RBL gets most ecommerce stores off the ground fast. Staying on it longer than necessary is one of the more expensive mistakes a growing store can make.
Wayflyer and Shopify made it possible for an ecommerce store to go from launch to established faster than almost any other kind of business. The finance that gets a store off the ground isn’t the finance that should still be funding it two years later, though. Staying on revenue-based lending longer than necessary costs real money.
Why do most ecommerce stores start on revenue-based lending?
It’s fast, it’s accessible without much trading history, and it’s matched to the ad-spend-and-inventory cycle new stores run on. Repayments that move with revenue rather than a fixed schedule are what a business with lumpy, early-stage cash flow needs, which is why RBL is usually the right call for the first one to two years. That’s not a niche choice either, Australia’s alternative lending market is forecast to grow from US$20.03 billion in 2025 to US$33.58 billion by 2029.
Here’s what’s at stake. The RBA business lending series for July 2026 put new small business variable loans at 7.07% p.a. and new fixed at 8.11%, and the RBA lifted the cash rate to 4.60% on 29 September 2026. Revenue-based facilities sit well above that, so moving across is usually the single largest cost reduction available to a business that has grown into qualifying for it.
What does the natural progression look like?
Once a store is established, moving to an overdraft or line of credit can save a significant amount compared to staying on RBL. Stores with a B2B arm have two more options: trade finance for bulk orders, and invoice finance for the wait on customer terms. Overdrafts and lines of credit suit general working capital once turnover is consistent.
| Stage | Typical product | Why |
|---|---|---|
| Year 0-2 | Revenue-based lending | Fast, minimal trading history required, priced against revenue not financials |
| Established | Overdraft, line of credit, or invoice finance | Materially cheaper once turnover is consistent and financials are clean |
What does it take to graduate to the cheaper products?
Consistent cashflow over time, not a single strong month, is what lenders in this space are assessing. Clean financials matter more the further you move toward the cheaper products, and a well-managed ATO account matters more than most sellers expect once you’re being assessed for them.
You can access these products without ticking every box, but the price goes up to match. See our ATO payment plan guide if that’s the piece holding your file back.
Staying on RBL too long is the actual mistake
The cost of revenue-based lending is designed for the stage it suits: early, fast-growing, thin on trading history. Once a business qualifies for cheaper products and stays on RBL anyway, out of habit or because switching feels like extra effort, that’s real money left on the table every month. If your numbers have been consistent for a while, ask whether you’ve already outgrown the product you’re on.
Been trading a year or two now?
Tell us how long you’ve been on your current facility, and we’ll tell you whether you’re ready to move to something cheaper.
Frequently asked questions
Give us the basics below and we’ll call you within the hour, or at the time you choose, then come back with the two or three offers worth your time.