Hey r/investing,
I work in banking. I work with underwriting and secondary markets day to day. I also consult small businesses on the side and have become a go-to locally for business owners trying to figure out financing. That background is what led me here.
I want to talk about a gap in the retail investing landscape that I don't think gets enough attention.
Revenue-based financing is a proven, profitable asset class. Square Capital has originated over $32 billion in advances to small businesses. Shopify Capital, PayPal Working Capital, Toast Capital, same story. These platforms lend to small businesses against their future revenue and collect a fixed return. However, many MCA (*merchant cash advance*) firms offer hidden predatory terms that end up costing business 20-30% on the borrowed capital.
**What we're building**
Fund Rascal is a marketplace that lets retail investors purchase fractional small business receivables directly. Here is the instrument:
* A qualified small business sells future receivables at a fixed 10% discount in exchange for immediate working capital
* Investors purchase those receivables on the marketplace, fractionally, across multiple deals
* Repayment is collected automatically via a daily percentage of the business's gross revenue
* The investor earns their 10% return over the repayment period, with annualized yield ranging from roughly 10% APR at slower repayment rates to 20 to 24% APR at faster ones
We've written our matrix to align with a \~3-8 month repayment timeline.
This is structured as a purchase transaction, not a loan. The business is selling an asset, not borrowing money. That distinction matters legally and structurally. There is no fixed payment schedule, no default trigger in the traditional sense. If revenue slows, repayment slows. If revenue is strong, the investor is paid back faster and the annualized return increases.
**Why this is different from existing alternatives**
This is not P2P lending. P2P lending is unsecured personal credit with no underlying asset and high default rates. This is revenue-backed. Repayment is tied directly to the business's actual daily gross revenue, verified through 36 months of POS transaction data before funding. Businesses must have $100K or more in annual revenue, three or more years in operation, and no negative bank balances in the prior 36 months to qualify.
This is not equity. There is no ownership stake, no cap table, no dilution, no liquidity event required. It is a fixed instrument with a defined return and a defined repayment mechanism.
**Where we are**
Early stage. Small team. We have not launched yet. We are in the process of lining up equity partners before formally incorporating so the structure is right from day one. We are targeting a Florida launch first, which has over 2.7 million small businesses, before expanding nationally.
**What we are genuinely looking for**
We want to hear from people who think seriously about portfolio allocation and alternative assets.
1. How do you think about a short-duration, revenue-backed instrument in a portfolio context? Where does it fit relative to bonds, REITs, or private credit?
2. What would need to be true about the platform, the regulatory structure, or the underwriting standards for you to allocate to something like this?
3. Is 10% fixed return with variable APR driven by repayment speed a compelling structure, or would you want a different pricing model?
4. What concerns would you raise that we haven't thought about?
Nothing to buy. Nothing to sign up for. We just want stress-tested feedback from people who know what they're talking about.
Happy to go deep on the mechanics, the legal structure, the underwriting model, or anything else.
View our product demo here [https://fundrascal.com/](https://fundrascal.com/)
Feel free to join the waitlist!
Thanks in advance!
