Clearco (formerly Clearbanc)

Clearco, formerly known as Clearbanc, is a revenue-based financing company that provides working capital to ecommerce, software-as-a-service and mobile app businesses. The company was founded in Canada but operates across the United States and other markets.

Clearco's model is based on providing non-dilutive growth capital to digital businesses in exchange for a fixed fee repaid as a percentage of ongoing revenue. Rather than taking equity in your business or charging traditional loan interest, Clearco offers an advance and collects repayment as a share of your monthly revenue until the advance plus the fixed fee is fully repaid.

This model is designed for digital businesses, particularly ecommerce brands and software companies, that have predictable online revenue and want to invest in growth such as digital advertising, inventory purchasing or marketing without selling shares in their company or taking on a traditional bank loan.

Business owners should carefully evaluate the true cost of Clearco financing. While the non-dilutive pitch is appealing for founders who do not want to give up equity, the effective annual cost of revenue-based financing can be high depending on the repayment pace. Calculate the annual equivalent rate and compare it against bank loans, SBA financing and venture debt before accepting.

Clearco has shifted its focus over time and primarily targets established digital businesses with meaningful revenue rather than very early-stage startups. Eligibility requirements vary and the company may not serve all business types.

Clearco operates in the United States. If you run a digital business looking for growth capital and want to preserve equity, Clearco is worth considering alongside a full comparison of available financing options.