# Annual Revenue

> Annual revenue is the total amount of money your business takes in from sales over a 12-month period, before subtracting any expenses, taxes, or costs.

## Key takeaways
- Annual revenue is the total income your business takes in from sales over 12 months, before subtracting any expenses, taxes, or costs.
- Lenders use it to set eligibility, size the offer, and price the deal, and revenue-based products lean on it especially heavily.
- Revenue is not profit, so strong sales don't guarantee you can cover new payments, and seasonal businesses should expect lenders to look at a trailing 12 months.

## How annual revenue works

Annual revenue — sometimes called gross revenue or top-line revenue — is the
**total income your business generates from sales** over a 12-month period,
measured **before** you subtract any expenses, salaries, or taxes. It's the
"top line" of your income statement.

For example, if a shop sells **$40,000** of product each month, its annual
revenue is roughly **$480,000**, even if rent, payroll, and inventory leave far
less as profit.

### Why lenders care

Revenue is one of the first numbers a lender looks at because it signals how much
cash flows through your business and, by extension, how much debt you can
realistically service. Lenders commonly use it to:

- **Set eligibility** — many products carry a minimum annual or monthly revenue.
- **Size the offer** — funding amounts are often a fraction of yearly revenue.
- **Price the deal** — alongside time in business and credit.

Revenue-based products lean on this number especially heavily: **revenue-based
financing** and **merchant cash advances** are repaid as a share of ongoing
sales, so your revenue directly drives both approval and repayment.

### What to watch for

- **Revenue is not profit.** Strong sales don't guarantee you can comfortably
  cover new payments — lenders also look at margins and cash flow.
- Be consistent about whether you're quoting **gross** revenue vs. net of refunds
  or returns; mismatches with your bank statements raise questions.
- Seasonal businesses should expect lenders to look at a **trailing 12 months**,
  not just a peak month.

Hoss Capital can match your revenue profile to funding options that fit how your
business actually earns.

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