# Introduction

SMEs have long struggled to acquire the funding they need to grow and scale; there's a global funding gap of $3.4tn, with 82% of businesses failing due to cash flow issues. This funding gap will increase due to the rise of businesses started in the COVID-19 pandemic combined with turbulence the global economy faces in 2022 and beyond. Current financing options are either inaccessible to SMEs, or the terms are not attractive enough for the SME to undertake the risk. For example, not all businesses are suited for Venture Capital or Venture Debt - nor should those businesses who *are* suited for VC/VD solely rely on these methods of financing to grow and scale, as it may not be in their best interest depending on the situation. Business loans are expensive, require high upfront collateralization and sit on the balance sheet as debt. Taking out a line of credit against receivables can be lengthy and require hefty legal and arrangement fees. The list can go on - we'll also mention that in many forms of debt-based financing, lenders can typically insert a [<mark style="color:blue;">Warrant</mark>](https://www.investopedia.com/terms/w/warrant.asp) clause, which can become troublesome for shareholders if the business struggles to repay it's debt on time.&#x20;

New types of financing are rapidly gaining popularity, but largely remain inaccessible to retail investors. The private credit market is expected to grow from $1.2tn in 2021 to $2.7tn in 2026 - new and emerging platforms are beginning to open this market up to retail investors, and we can expect a significant uptake in private credit investments from retail as an alternative investment to traditional assets such as stocks and indexes (which became more accessible in the 2010s thanks to commissionless trading platforms and neobanks). Revflow builds upon the current innovations in the financing space: with a focus on subscription-based businesses, Revflow's platform securitises future monthly recurring revenue into tradable assets, tokenises them on the Solana blockchain, then allows both institutional and retail investors to trade these assets for yield similar to fixed-income products, all whilst being disconnected from the volatility of the stock and crypto markets.&#x20;

Why subscription-based businesses? We've all been exposed to a subscription; whether it's Netflix, Amazon Prime, business tools like ClickUp and Hubspot, or even products that are not structured in a subscription model but operate like one (phone contracts, rental agreements etc.). Subscriptions benefit both consumers and businesses; subscriptions offer consumers convenience and cost-savings, whilst offering businesses consistency via predictable revenue and better cash-flow management. This is why the subscription-based market has revenues topping $650bn in 2020, and it's also why revenue is expected to boom to $1.5tn by 2025. Additionally, the nature of subscriptions, coupled with open banking integrations, make predicting risk levels *much* easier; businesses can be scored in near-real time on their financial health, growth prospects and likelihood of repaying a lender. Factor in capped trading rates (for example, 65% of $1,000,000 ARR = $650,000 trading limit), and you're left with a stable, reliable, yield-bearing asset. Finally, a strong focus on the subscription vertical allows Revflow to really nail down a funding stack that's fit for the needs of a business in the 2020s and beyond, and allows businesses and investors alike to capitalise on tomorrow, today.&#x20;


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