# The No Upfront Fee, Longer Term,  More Flexible Alternative to Pipe

Up to 36 Months payback

Up to 12 Months of NO payment

Option for Zero Cost financing with [Boost](/content/archived-pages/boost-old/index.html)

[compare funding options](/content/lp/funding-comparison-calculator/index.html)

trusted by

Suzie Dergham

CEO of Guru Experience

##### Why I refinanced my Pipe deal with Ratio

_Ratio is unequivocally the best RBF vendor we have ever worked with. We refinanced our PIPE deal with Ratio because they were not only able work with our unique needs, but we were also able to get more funding with better terms through them. Ratio's innovative “True Sale” product is a game changer, delivering key business value that we don’t see elsewhere._

_Furthermore, Ratio’s Boost product offers an embedded Buy-Now-Pay-Later (BNPL) option, which is very unique. We are excited to work with Ratio to accelerate our revenue using Boost._

## Why Choose Ratio over Pipe

No payments for up to 12 months

| Feature      | Ratio            | Pipe           |
|--------------|------------------|-----------------|
| Payback term | Flexible (1-36 months) | Fixed (variable)|
| Upfront Fee  | None             | Yes            |
| % of ARR     | Up to 80%       | Varies        |
| Capital      | Up to $50M      | Varies        |  
| Discount Rate| As low as 8%    | Varies        |  
| Dilution     | No               | Yes            |  
| Funding speed| As fast as 48h   | Slower           |  
| Covenants    | None             | Yes            |  
| 0% Financing  | Available        | Not typically   |

## FAQs

What is Ratio Trade?

Ratio Trade is a new type of growth financing service that allows companies to convert their annual and multi-year contracts to instant cash. It involves neither debt nor dilution. It takes less than 48 hours to approve and only a few days to receive the capital into your bank account.

How does Ratio Trade work?

Ratio Trade goes from onboarding to cash in 5 simple steps:

1. You connect to your banking, financial, and billing systems through the Ratio Portal;
2. Ratio reviews your submission and approves or declines your company within 48 hours;
3. You upload your annual or multi-year contracts;
4. Ratio provides an indicative cash offer for each of your contracts;
5. You accept the offer and receive the cash in your account!

What is a True Sale?

A True Sale is a transaction where cash-generating assets _(accounts receivable, annual contracts, multi-year contracts, etc.)_ are fully transferred from a seller to a buyer for a purchase consideration.

In contrast to both debt-financing, which is treated as a liability on the balance sheet, and equity financing, which increases the total number of shares issued, a True Sale causes neither dilution nor debt, and results in direct substitution of assets for instant cash.

What is the value of True Sale for public and private companies?

For public companies, True Sale enables compliance with cash reporting regulations and faster cash conversion.  
For private companies, True Sale offers a new source of growth capital that is distinct from venture debt, equity capital, or revenue-based financing.

Is this debt?

Ratio Trade or Ratio Boost are not debt. We purchase each contract and advance the cash to the seller as if it were paid by the buyer at the time of the purchase.

How much does Ratio Trade cost?

Ratio Trade involves the sale of cash-generating assets to Ratio for a purchase consideration. This consideration includes a nominal fee (known as the discount rate) for the value we provide in fast-forwarding cash flows from the future to the present.

What kinds of companies use Ratio Trade?

Ratio’s customers range from large public companies and large private enterprises to venture-funded early-stage and growth-stage startups, and bootstrapped companies with no outside investments.

How is Ratio Trade better than Venture Debt?

1. There are no warrants;
2. No covenants or restrictions;
3. You can convert select short-term, illiquid assets into instant liquid cash without any debt;
4. Super stretch your company’s runway with no repayments for up to 12 months.

How is Ratio Trade different from traditional Revenue Based Financing?

There is no automated repayment every month as a % of revenues. You pay Ratio only when the customer related to the contract that you sold to Ratio pays.

How is Ratio Trade different from Factoring?

Traditional factoring is a financial arrangement where companies can sell their pending invoices (accounts receivables) to a third party. In contrast, Ratio is primarily about converting long-term contracts into cash.

How does Ratio determine the discount rate for purchasing contracts?

Discount rates are determined by our risk engine that uses proprietary algorithms to assess the credit-worthiness of both the seller and the customer.