Key Takeaways
- Revenue-based funding replaces fixed monthly payments with a percentage of your actual daily revenue
- A factor rate (e.g., 1.25) determines the total repayment amount — borrow $100K, repay $125K
- Bankable Funds provides RBF from $25K to $750K with decisions in 48 hours
- No citizenship requirement — qualification is based entirely on your business revenue and bank history
- RBF is ideal for businesses with consistent revenue but variable cash flow months
Revenue-based funding works by advancing a lump sum against your verified business revenue, then collecting repayment as a fixed percentage of your daily or weekly sales. Unlike a term loan with rigid monthly payments, revenue-based funding breathes with your business — your payment automatically decreases when revenue dips and increases when revenue is strong.
The Core Mechanics
Here's how a typical revenue-based funding transaction works:
- Application and assessment — You submit business bank statements (3–6 months) and your business information. Bankable reviews your average monthly revenue, consistency, and trends.
- Offer generation — Based on your revenue, Bankable generates an offer: a funded amount and a factor rate. Example: $200,000 funded at a 1.25 factor rate = $250,000 total repayment.
- Remittance rate — A remittance percentage is set (typically 10–20% of daily gross sales). This is deducted automatically from your business bank account or credit card processor each business day.
- Repayment completion — Once the total repayment amount is collected ($250,000 in the example), the funding is fully repaid. No additional fees.
- Renewal — After repayment, businesses can renew their funding, often at improved terms if revenue has grown.
Understanding Factor Rates
Revenue-based funding uses factor rates rather than interest rates. A factor rate is a simple multiplier applied to the funded amount:
| Funded Amount | Factor Rate | Total Repayment | Cost of Capital |
|---|---|---|---|
| $50,000 | 1.20 | $60,000 | $10,000 |
| $100,000 | 1.25 | $125,000 | $25,000 |
| $250,000 | 1.30 | $325,000 | $75,000 |
| $500,000 | 1.35 | $675,000 | $175,000 |
Factor rates do not compound like interest rates. The cost is set at the time of funding — it doesn't change if repayment takes longer than expected.
Who Revenue-Based Funding Is Best For
RBF is ideally suited to businesses with: consistent monthly revenue of $15,000+, at least 6 months of operating history, a need for capital that outpaces what a credit card or personal loan can provide, and an owner who values payment flexibility over the lowest possible total cost.
For non-citizen business owners who can no longer access SBA 7(a) loans, RBF provides a comparable capital injection ($25K–$750K) with a faster timeline and no citizenship requirement. The Bankability Score assessment takes 5 minutes to complete and delivers a personalized funding offer.
Frequently Asked Questions
They share similarities but differ in structure. A merchant cash advance (MCA) is technically a purchase of future receivables and often collects through a split of credit card transactions. Revenue-based funding is typically a business loan or advance structured with explicit factor rates and bank ACH remittance. Bankable Funds' RBF product provides full upfront disclosure of all costs.
Bankable Funds requires a minimum of $15,000 per month in gross business revenue (approximately $180,000 annually). Higher revenue and greater consistency unlock larger funding amounts and potentially lower factor rates.
Repayment time depends on your revenue volume and the remittance percentage. At a 15% daily remittance rate on $200K monthly revenue, a $250,000 advance (at 1.25 factor) would repay in approximately 8–10 months. Faster revenue growth accelerates repayment; slower periods extend it — but the total repayment amount stays fixed.
Factor rate products do not reduce in cost with early repayment the way interest-based loans do. The total repayment amount is fixed at the time of funding. Some providers offer early payoff discounts — check with Bankable Funds for current terms.
Because repayment is a percentage of revenue, lower revenue means lower daily payments. Your repayment period extends automatically rather than creating a shortfall. This built-in flexibility is one of the key advantages of RBF over fixed-payment term loans.
Generally, Bankable Funds recommends reaching at least 50% repayment on an existing advance before considering an additional facility. The total debt service as a percentage of revenue is a key metric — maintaining it below 20–25% of gross revenue is typically recommended for healthy cash flow.
Reporting practices vary by lender. Some RBF providers report to Dun & Bradstreet, Experian Business, or Equifax Business. Responsible repayment can help build your business credit profile. Ask Bankable Funds specifically about their reporting practices at the time of application.
Bankable reviews 3–6 months of business bank statements to calculate average monthly revenue, revenue volatility, existing payment obligations, and deposit consistency. The proprietary Bankability Score algorithm produces a risk-adjusted funding offer. Personal credit score and immigration status are not primary factors.