Key Takeaways
- Revenue-based funding provides a lump-sum capital advance that is repaid as a fixed percentage of your business's monthly revenue — payments flex automatically with your cash flow, so slow months cost less.
- Bankable's minimum qualification threshold is $15,000 per month in consistent business revenue over 12 months — no citizenship requirement, no green card needed, and no collateral beyond a general business lien.
- Factor rates (not interest rates) determine the total cost — a factor rate of 1.28 on a $100,000 advance means you repay exactly $128,000 regardless of how long it takes.
- Tranche structures allow non-citizen business owners to access total capital up to $5M through sequential releases tied to repayment performance — a disciplined approach that grows your capacity with your track record.
- The typical Bankable funding cycle runs 6-12 months from first advance to full repayment, at which point most clients qualify for a renewal advance at improved terms due to demonstrated repayment history.
Revenue-based funding is one of the oldest forms of business financing — royalty-based investments and merchant banking have operated on this principle for centuries. In its modern form, it is the most accessible, fastest, and most flexible capital product available to non-citizen business owners in 2026. Understanding exactly how it works — the math, the mechanics, the structure — is essential before you apply. This guide leaves nothing out.
What Revenue-Based Funding Actually Is
Revenue-based funding (also called revenue-based financing, RBF, or in its consumer-facing form, merchant cash advance) is a transaction in which a funding company provides your business with a lump-sum capital advance. In exchange, you agree to remit a fixed percentage of your monthly business revenue — called the retrieval rate or holdback — until you have repaid a predetermined total amount, called the payback amount.
The payback amount equals your advance multiplied by a factor rate. The advance, factor rate, and retrieval rate are the three core variables of every Bankable funding agreement. Everything else — total cost, monthly payment, repayment timeline — flows from these three numbers.
This is fundamentally different from a traditional loan. A loan has a fixed interest rate, a fixed monthly payment, and a fixed term. Miss a payment and you default. Revenue-based funding has a fixed total payback amount and a payment that is always a percentage of your revenue — so it automatically adjusts. A slow month generates a smaller payment. A strong month generates a larger one. You cannot miss a payment in the traditional sense because the payment is defined as a share of whatever you actually earn.
The Three Core Variables Explained
1. The Advance Amount
The advance is the capital Bankable deposits into your business bank account. Bankable advances between 1x and 2.5x your average monthly revenue, depending on underwriting factors. For initial advances, the typical range is 1x to 1.5x monthly revenue. For renewal advances from businesses with strong repayment track records, multiples up to 2.5x are common.
2. The Factor Rate
The factor rate is a multiplier that determines your total repayment obligation. Factor rates for Bankable advances range from approximately 1.15 to 1.45, depending on business age, revenue consistency, industry, and amount. A factor rate of 1.28 means you will repay $1.28 for every $1.00 you receive. Factor rates are not annual percentage rates (APR) — they are flat multipliers on the advance amount.
The effective APR of a revenue-based advance depends entirely on how long repayment takes. The same 1.28 factor rate on a $100,000 advance results in roughly 56% effective APR if repaid in 6 months, and roughly 28% effective APR if repaid in 12 months. Faster repayment = higher effective APR. This is why businesses with high and growing revenue benefit most from revenue-based funding — their natural growth velocity reduces the effective cost.
3. The Retrieval Rate
The retrieval rate is the percentage of your gross monthly revenue that is remitted to Bankable each month. It typically ranges from 8% to 18%. Bankable calibrates this rate to ensure your monthly repayment is aggressive enough to repay within a reasonable timeframe (6-18 months) while leaving sufficient cash flow for operations.
For a business with $60,000 average monthly revenue and a 12% retrieval rate, the expected monthly payment is $7,200. If revenue rises to $80,000, the payment rises to $9,600. If revenue dips to $40,000 due to a slow season, the payment automatically drops to $4,800. This built-in flexibility is the defining advantage of revenue-based funding over any fixed-payment financing product.
Real Math Example: A $100,000 Advance
Example: H-2B Landscaping Business, Miami FL
In this example, the business owner receives $100,000 to invest in equipment and crew expansion. Over approximately 16 months, 12% of revenue flows back to Bankable until the $128,000 payback is reached. The $28,000 cost of capital is treated as a business expense — a financing cost that enabled growth that generated far more than $28,000 in additional revenue.
How Bankable Underwrites: The 5 Factors
Bankable's underwriting process evaluates five primary factors using your 12-month bank statement history. No appraisals. No SBA eligibility checks. No citizenship verification. The five factors are:
- Average Monthly Revenue — the average of gross deposits across all 12 months, excluding personal deposits, loan proceeds, and inter-account transfers. This is your baseline.
- Revenue Consistency (Coefficient of Variation) — how stable is your monthly revenue? Businesses with low month-to-month variance score higher and receive larger multiples and lower factor rates. Highly seasonal businesses can still qualify but may receive smaller advances or higher retrieval rates.
- Business Age — businesses over 24 months old qualify for larger advances and better terms. Businesses under 12 months have limited qualifying history and typically receive smaller initial advances.
- Existing Debt Service — Bankable calculates your current monthly debt obligations (loans, leases, other advances) relative to your revenue. Total monthly debt service including the new Bankable payment generally should not exceed 35% of monthly revenue.
- Industry and Business Type — certain industries carry higher performance risk (restaurants, cannabis, adult entertainment) and may receive higher factor rates or lower advance multiples. Most industries in which non-citizen business owners operate — construction, trucking, medical staffing, retail, ecommerce — are in Bankable's preferred risk tier.
The Tranche Structure for Larger Capital Needs
Businesses seeking more than $250,000 — or businesses whose revenue history does not yet fully support a single large advance — benefit from Bankable's tranche structure. A tranche is a defined portion of a larger total commitment that is released upon meeting specific milestones.
A typical three-tranche structure for a business seeking $500,000 total:
- Tranche 1 — $150,000 funded at closing. Repayment begins immediately at 12% retrieval rate.
- Tranche 2 — $175,000 released after 60-90 days of on-time repayment and demonstrated revenue consistency during that period.
- Tranche 3 — $175,000 released after Tranche 2 is 40% repaid, provided revenue continues to meet or exceed the baseline.
This structure serves two purposes. It protects the funding company's capital by confirming that the business performs as represented. And it protects the business owner by preventing them from over-leveraging in a single moment — injecting capital in the amounts the business can productively absorb and repay.
For non-citizen business owners who have been turned away by traditional banks and SBA programs, the tranche structure is often the first time they have had access to a scalable, growing capital relationship. Each successful tranche builds a track record that makes the next one larger and cheaper. Check your Bankability Score to see what tranche structure you might qualify for today, or explore our comparison of SBA alternatives to understand how revenue-based funding stacks up against other options.
What Revenue-Based Funding Is Best Used For
Revenue-based funding is optimized for situations where capital can generate a measurable return faster than its cost. The best use cases for non-citizen business owners in 2026 include:
- Inventory purchasing — buying materials or goods at volume discounts before peak demand season
- Hiring and payroll bridging — staffing up ahead of a contract or peak season when revenue is not yet flowing
- Equipment acquisition — purchasing a productive asset that generates revenue from day one
- Marketing and customer acquisition — for businesses with proven CAC and LTV ratios where ad spend generates measurable returns
- Expanding to a second location — when one location's revenue is strong and you have a clear unit economics model for expansion
Frequently Asked Questions
Revenue-based funding is a financing model where a business receives a lump-sum capital advance in exchange for a percentage of its future monthly revenue until a predetermined total repayment amount is reached. Unlike traditional loans, there are no fixed monthly payments — the repayment amount rises and falls with your business revenue, protecting cash flow during slow periods.
A factor rate is a multiplier applied to your advance amount to determine your total repayment. A factor rate of 1.28 on a $100,000 advance means you repay $128,000 total. Unlike an interest rate (which is annualized and depends on repayment term), a factor rate is a fixed cost regardless of how long repayment takes.
Bankable requires a minimum of $15,000 per month in consistent business revenue, demonstrated over 12 months of bank statements. Revenue must come from your primary business operations — not personal deposits, loans, or one-time windfalls.
A tranche structure breaks a larger funding commitment into sequential releases. Bankable may approve a business for $500,000 total but release it in three tranches tied to repayment milestones. This structure allows larger total capital than a single advance would warrant while managing risk for both parties.
Bankable typically advances between 1x and 2.5x your average monthly revenue. A business averaging $50,000 per month can generally access $50,000 to $125,000 in an initial advance. The exact multiple depends on revenue consistency, industry risk, business age, and existing debt obligations.
Bankable's retrieval rate typically ranges from 8% to 18% of gross monthly revenue. A business with $60,000 monthly revenue and a 12% retrieval rate pays approximately $7,200 per month. If revenue drops to $40,000, the payment automatically drops to $4,800 — without renegotiation.
No. Bankable is not an SBA lender and has no citizenship requirements. H-1B, L-1, E-2, TN, O-1, DACA, TPS, and all other visa or immigration statuses are eligible. Qualification is based entirely on business revenue, bank statement history, and time in business.
Bankable delivers decisions within 48 hours of receiving a complete application. The application requires 12 months of business bank statements, a voided check, and basic business information. Most approvals are communicated within 24 hours. Funding is typically wired within 1-3 business days of signing the agreement.
Yes. Bankable offers renewal advances when you have repaid 50-65% of your current balance. Renewals are common for businesses using capital for repeating needs like inventory cycles or seasonal preparation. Stacking must be managed carefully to avoid over-leveraging your revenue stream.
The core documents are: 12 months of business bank statements, a government-issued photo ID for all owners with 20%+ ownership, and basic business information (EIN, legal name, state of formation). For funding above $500,000, Bankable also reviews two years of business tax returns and a current profit and loss statement.