Revenue Based Financing Agreement Template for Indonesia

A Revenue Based Financing Agreement allows you to secure business growth capital in Indonesia while maintaining full ownership of your company. This innovative financing structure links your repayment obligations directly to your business revenue performance, making it an attractive alternative to traditional bank loans or equity investment for companies with reliable income streams.

When do you need this document?

You'll need this agreement when seeking growth capital for expansion, working capital, or strategic initiatives without surrendering equity stakes or personal guarantees typically required by banks. This financing model works particularly well for technology companies, e-commerce platforms, SaaS businesses, and other ventures with predictable monthly recurring revenue. It's also valuable when your business has strong revenue growth but limited collateral for traditional lending, or when you want to avoid the lengthy due diligence processes associated with equity fundraising. Many Indonesian startups and SMEs use revenue-based financing to fund marketing campaigns, inventory purchases, or geographic expansion while retaining complete control over business decisions.

Key legal considerations

Your agreement must clearly define revenue calculation methodologies, including which income streams count toward the revenue share and any exclusions such as taxes, refunds, or extraordinary items. The payment cap provision protects you from excessive repayment obligations, typically limiting total payments to 1.5-2 times the original investment amount. You should carefully review the revenue reporting requirements, as most agreements mandate monthly financial statements and access to accounting systems for verification. Consider including clauses for payment deferrals during revenue shortfalls and early repayment options if your business performs exceptionally well. The agreement should also address what happens in merger, acquisition, or bankruptcy scenarios to protect both parties' interests.

Legal requirements in Indonesia

Your Revenue Based Financing Agreement must comply with Indonesian Civil Code provisions governing contract formation, including offer, acceptance, and consideration requirements. Under Law No. 40 of 2007 on Limited Liability Companies, corporate borrowers need proper board resolutions and may require shareholder approval depending on the financing amount relative to company assets. OJK Regulation No. 77/POJK.01/2016 may apply if the financing provider operates as a peer-to-peer lending platform or similar fintech entity, requiring additional compliance measures. Foreign investment components must align with Law No. 25 of 2007 on Investment, particularly regarding permitted business sectors and ownership structures. You must ensure electronic signatures comply with Law No. 11 of 2008 on Electronic Information and Transactions if executing the agreement digitally, and maintain proper Indonesian language translations if required by the financing provider or regulatory authorities.