Key Takeaways
- Revenue-based funding uses factor rates (1.15–1.45), not traditional APR — understand the difference
- A factor rate of 1.25 on a $100K advance means you repay $125K total, regardless of how long it takes
- Factor rates do not compound — the cost is fixed at origination, unlike interest that accrues daily
- Non-citizen status itself does not determine your rate — your business revenue and risk profile do
- The March 2026 SBA closure to non-citizens eliminated the lowest-rate option — private funding costs more but is accessible
Non-citizen business loans in 2026 primarily use factor rates rather than traditional interest rates. Understanding this distinction is critical for comparing costs and making informed funding decisions. Here is a complete guide to what non-citizen business owners should expect to pay for private business capital in 2026.
Factor Rates vs. Interest Rates: What's the Difference?
Traditional loans (including the now-inaccessible SBA 7(a)) use annual percentage rates (APR). You pay a percentage of the remaining balance over time, so faster repayment reduces total cost. Revenue-based funding uses factor rates — a multiplier applied to the funded amount at origination, producing a fixed total repayment amount regardless of how long repayment takes.
| Metric | Factor Rate (Revenue-Based) | APR (Traditional Loan) |
|---|---|---|
| How it's expressed | 1.15, 1.25, 1.35 (multiplier) | 8%, 12%, 24% (per year) |
| Cost basis | Applied to funded amount once | Applied to remaining balance continuously |
| Early repayment benefit | None (fixed total) | Yes — saves interest |
| Late repayment penalty | None (fixed total) | Additional interest accrues |
| APR equivalent | Varies by repayment speed | Fixed |
What Determines Your Factor Rate
Non-citizen status itself does not affect your factor rate. The factors that determine your rate are:
- Revenue strength — Higher revenue, lower factor rate
- Revenue consistency — Stable month-to-month, lower risk, lower rate
- Time in business — Longer history, lower rate
- Industry risk — Lower-risk industries receive more favorable rates
- Existing debt load — Less existing debt, lower rate
Comparing Private Funding to Former SBA Rates
SBA 7(a) loans carried rates of prime + 2.25–4.75%, which in early 2026 was approximately 9–12% APR. Revenue-based funding at a 1.25 factor rate over 9 months has an effective APR of approximately 38–45%. This is significantly higher — but this comparison is misleading in the post-SBA-exclusion world. When SBA is off the table for non-citizens, the comparison is not "RBF vs SBA" — it's "RBF vs no capital at all."
Private revenue-based funding at 1.25x on $100,000 costs $25,000 in total fees. If that $100,000 enables $150,000 in new revenue within the repayment period, the net benefit is $125,000 — making the $25,000 cost an excellent investment.
Frequently Asked Questions
A factor rate below 1.25 is excellent for most business profiles. Rates of 1.20–1.30 are typical for well-qualified businesses with strong, consistent revenue. Rates above 1.40 are applied to higher-risk situations. Your Bankability Score assessment will show you what rate range your business qualifies for.
Factor rates at Bankable Funds are determined algorithmically based on risk profile rather than through negotiation. However, improving your Bankability Score by growing revenue and cleaning up bank account health can shift your rate into a more favorable bracket. Submitting a stronger application typically produces a better rate.
No. Bankable Funds applies the same factor rate methodology to all applicants. A citizen with identical business metrics to a non-citizen receives the same rate. Citizenship is not a pricing factor in Bankable's revenue-based funding model.
Factor rate products typically include an origination fee (commonly 1–3% of the funded amount). This fee is disclosed upfront and may be deducted from the funded amount or added to the total repayment. Bankable Funds provides full fee disclosure before signing any agreement.
Small business credit cards carry APRs of 18–28%. Revenue-based funding effective APR varies widely based on repayment speed but generally falls between 30–80% for typical 6–12 month advance periods. For many non-citizens, credit cards are the only alternative to RBF — and credit cards typically have lower limits and higher actual costs for operational expenses.
No. The factor rate produces a fixed total repayment amount. If revenue is lower than expected and repayment takes longer, your total cost does not increase. This is an advantage compared to interest-based loans where delayed repayment increases total cost.
Bankable Funds' revenue-based products are structured on revenue, not collateral. Offering collateral does not typically reduce factor rates but may unlock access to different, collateral-backed loan products that carry lower rates. Ask about collateral-secured options if you have significant business assets.
At a 1.25 factor rate and 2% origination fee: Total repayment = $312,500. Origination fee = $5,000 (typically deducted from disbursement). Net received = $245,000. Total cost = $67,500. This is the worst-case scenario — some businesses receive rates below 1.25 or origination fees below 2%. The Bankability Score assessment provides your specific offer.