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BUSINESS FINANCING GLOSSARY

Annual Recurring Revenue (ARR)

The predictable yearly revenue from subscriptions or contracts. A key metric for SaaS and recurring-revenue businesses raising capital.

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Related terms

Average Monthly Revenue→Your total revenue divided across the months a lender reviews (usually 3–6 months of bank statements). Revenue-based and MCA underwriting leans heavily on this.Gross Margin→Revenue minus the direct cost of goods sold, as a percentage of revenue. It shows how much each sale contributes before overhead.Revenue-Based Financing (RBF)→Capital repaid as a percentage of revenue until a set amount is met, with no fixed term and no collateral. Payments flex up in strong months and down in slow ones.

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