How tokenization could unlock a new era for funders and syndicators alike.
Revenue-based financing (RBF) has emerged as a significant alternative capital market, with major players like PayPal and Amazon deploying substantial funds to support small businesses. PayPal, for instance, has funded over $30 billion globally, issuing more than 1.4 million loans to over 420,000 merchants as of March 2025. Amazon offers its own RBF solutions, contributing significantly to this rapidly growing market.
Despite its growth, the RBF space remains fragmented and lacks the institutional infrastructure found in traditional lending markets. Funders often operate on a deal-by-deal basis, raising and recycling capital manually. Syndication is typically handled through informal channels such as emails or calls, leading to inefficiencies and missed opportunities.
The Syndication Bottleneck
In traditional finance, syndicated loans involve multiple lenders pooling resources to fund large loans, with a lead bank coordinating the process. This structure allows for risk-sharing and efficient capital deployment. However, in the RBF sector, syndication often lacks such formal structures. Deals are frequently syndicated through informal networks, relying on personal relationships and manual processes. This approach can lead to delays, limited scalability, and challenges in risk assessment.
The absence of standardized documentation and centralized platforms means that funders may miss out on lucrative opportunities simply because they cannot mobilize capital quickly enough. Moreover, the lack of transparency in deal terms and performance metrics can deter potential syndicate members, further constraining liquidity.
Capital Constraints and Infrastructure Gaps
Many RBF funders face capital ceilings that limit their ability to scale. Unlike traditional lenders with access to vast capital markets, RBF providers often rely on limited pools of capital, recycling funds as repayments are received. This model can hinder growth, especially when demand for financing outpaces the rate at which capital is replenished.
Additionally, the infrastructure supporting RBF transactions is often underdeveloped. Without robust platforms for deal origination, underwriting, and servicing, funders may struggle with operational inefficiencies. The lack of integrated systems can lead to errors, compliance issues, and increased operational costs, further straining resources.
The Promise of Tokenization
Tokenization offers a compelling solution to these challenges. By representing receivables as digital tokens on a blockchain, tokenization can facilitate faster, more transparent, and more efficient syndication. Tokens can be easily transferred, fractionalized, and traded on secondary markets, enhancing liquidity and enabling funders to access a broader investor base.
Moreover, tokenization can introduce standardized documentation and real-time performance tracking, increasing transparency and trust among participants. Smart contracts can automate key processes, such as payment distributions and compliance checks, reducing operational burdens and mitigating risks.
The potential of tokenization in RBF is already being explored. For instance, EVIDENT and IDA Finance Hong Kong Limited have partnered to tokenize and distribute RBF investment products, aiming to enhance liquidity and accessibility in the market.
Building a More Liquid Future
Embracing tokenization could transform the RBF landscape, addressing current limitations in syndication practices, infrastructure, and capital access. By leveraging blockchain technology, funders can create more efficient, transparent, and scalable financing models.
As the RBF market continues to grow, with projections estimating significant expansion in the coming years, adopting innovative solutions like tokenization will be crucial. By doing so, funders can unlock new opportunities, better serve small businesses, and contribute to a more dynamic and inclusive financial ecosystem.
Scott Goldman, CEO
Receivabull Inc.
