Not too short, not too long
Bonside RRAs are the Goldilocks of term length.
We often see two universes of non-dilutive, monthly repayment financing:
The Merchant Cash Advance – typically 6 to 12 months repayment
The Term Loan – typically 7 to 10 years repayment
While MCAs are a quick way to receive financing, requiring full repayment in under a year leaves little time to deploy and see a return on the capital. So while great for inventory orders, not so great for store build–outs.
Term loans, on the other hand, provide ample time for repayment. But that comes at a price tag: collateral and personal guarantee requirements in the event that something unpredictable happens in the next 10 years.
At Bonside, our Repeatable Revenue Agreements (RRAs) sit in the middle with a 3 to 5 year repayment timeline, providing sufficient time to invest and see the returns of a build-out, while keeping repayment in a window of greater predictability.