Key Takeaways
- Revenue-based funding repays as a percentage of daily revenue — not a fixed monthly payment
- This structure is ideal for U visa businesses with seasonal or variable revenue patterns
- Bankable charges a factor rate (not an interest rate) — total cost is known upfront
- No green card required — your business revenue is the qualification and the collateral
- Payments automatically adjust to your business's revenue level every day
Revenue-based funding — also called revenue-based financing or a merchant cash advance — is a form of business capital where the repayment is structured as a percentage of your ongoing daily business revenue rather than a fixed monthly payment. It is the dominant funding model used by Bankable to serve U visa business owners, and understanding how it works helps you make an informed decision about whether it is right for your business.
How Revenue-Based Funding Works
Here is a concrete example:
- Bankable advances you $50,000
- Your total repayment amount is $65,000 (factor rate of 1.30)
- Your daily repayment rate is 12% of your daily revenue
- If your daily revenue is $2,000: your daily payment is $240
- If your daily revenue drops to $1,000: your daily payment drops to $120
- If your revenue surges to $4,000: your daily payment is $480 (payoff accelerates)
- You reach total repayment of $65,000 faster in good months, slower in slow months — but the total amount never changes
Key Terms to Understand
| Term | Definition |
|---|---|
| Advance Amount | The cash you receive from Bankable |
| Factor Rate | A multiplier (e.g., 1.25-1.45) that determines total repayment. 1.30 factor on $50K = $65K total repayment. |
| Retrieval Rate | The daily percentage of revenue applied to repayment (e.g., 10-15%) |
| Holdback | Another term for retrieval rate |
| Estimated Term | The approximate time to full repayment based on average revenue — not a fixed deadline |
Why Revenue-Based Funding Works for U Visa Businesses
- No fixed payment risk: Unlike a bank loan, there is no fixed monthly payment that can trigger default if one month is slow
- Aligns with revenue reality: Immigrant-owned businesses often have more variable revenue than conventional underwriting models account for
- No collateral required: Unlike SBA loans, no real estate pledge or personal guarantee of assets is required
- No residency requirement: Private capital, private rules — immigration status is not a factor
Apply at Bankable's Bankability Score. Compare to traditional options at our bank vs. Bankable comparison page.
Frequently Asked Questions
A factor rate is applied to the original advance once to determine the total repayment amount. An interest rate accrues over time. Factor rates are simpler to calculate but do not benefit from early repayment the way interest-bearing loans do.
Yes, in most cases. Factor rates of 1.25-1.45 are higher than bank loan interest rates. However, bank loans are not available to U visa holders — so the comparison is theoretical. Bankable's rates reflect the private capital market available to U visa businesses.
Your daily payment drops proportionally. If revenue goes to zero, so does the daily payment. This is the fundamental risk management advantage of revenue-based structure.
For most Bankable advances, there is no prepayment penalty — you pay the total repayment amount, however quickly you get there. Confirm this in your specific offer terms.
Typically 10-15% of daily credit card and ACH revenue. This is calibrated to ensure repayment without straining daily operations.
Bankable integrates with your business bank account to monitor daily ACH and credit card deposits. Repayment is automatically deducted daily or weekly.
Bankable does not have a formal pause mechanism — the percentage-based structure provides built-in flexibility. In genuine hardship situations, we work with clients individually.
Factor rates range from 1.15 to 1.45 depending on advance size, time in business, and revenue stability. Stronger revenue history and larger advances typically receive lower factor rates.