Small Business Expansion Program

The Small Business Expansion Program, operating within the OBDF direct loan program, is a new alternate financing solution fit for situations in between "almost bankable" and angel or venture capital deals, similar to mezzanine financing for working capital. This pilot program allows businesses to pay a periodic revenue payment as a percentage of net sales combined with scheduled monthly payments of principal and interest (fixed rate) to accommodate growing companies that may not qualify for traditional financing.

How it Works

The percentage of sales varies per applicant. Business Oregon seeks to realize a target return on investment—from repayment of principal, interest and revenue payments—over a 3- to 7-year period. Additional payments may be required in event of early payoff or sale of the company. Once the pre-determined return target has been achieved, all payments stop and the company has satisfied its repayment obligations.

Key Requirements

The company must satisfy all requirements of the OBDF program including, but not limited to, being a traded-sector business and having significant job creation impacts. Each revenue finance request will be evaluated on a case-by-case basis, but the following will be required, in general:

  • Existing history of sales
  • Potential for rapid growth in sales
  • History of significant gross profit margins or reasonable expectations of ability to achieve significant gross profit margins
  • Collateral to secure the loan or personal guarantees of major owners
  • Typical financing amount of up to $250,000.


Revenue financing provides many benefits to Oregon businesses compared to traditional debt and equity financing, including:

  • Business owner does not dilute ownership interest.
  • Revenue financing may be less expensive than equity-based investment.
  • Makes financing available that may not be available from traditional sources of debt or Business Oregon's other business finance programs.