Key Takeaways
- Factor rate (1.15–1.45): the multiplier applied to your advance to calculate total repayment
- EAD: Employment Authorization Document — the primary immigration document for non-citizen business funding
- UCC-1: Uniform Commercial Code financing statement — the standard lien filed when you receive business financing
- Bankability Score: Bankable Funds' proprietary assessment of your business's funding readiness
- Revenue-based funding: capital repaid as a percentage of business revenue rather than fixed monthly payments
Understanding the language of business funding is essential for non-citizen entrepreneurs navigating the capital landscape. This glossary defines every term you'll encounter in business funding applications, agreements, and lender communications.
A–B
- ACH (Automated Clearing House)
- The electronic network for business-to-business and business-to-bank payments. Most Bankable repayments are collected via daily or weekly ACH debits from your business bank account.
- Advance
- The lump sum provided to your business at funding. Revenue-based funders use "advance" rather than "loan" because the product is technically a purchase of future receivables rather than a debt obligation.
- Annual Percentage Rate (APR)
- The annualized cost of borrowing, including interest and fees. Revenue-based advances don't have a traditional APR because there's no fixed term — but equivalent APRs can be calculated based on repayment speed. Higher revenue months create lower equivalent APRs.
- Bankability Score
- Bankable Funds' proprietary assessment of a business's funding readiness, evaluating monthly revenue, EAD status, business history, existing debt, and industry factors. Check yours at bankablefunds.com/bankability-score/.
- Business Credit Score
- A score (typically Dun & Bradstreet PAYDEX, Experian Business, or Equifax Business) that reflects your business's credit history. Unlike personal credit, non-citizens can build business credit scores without a Social Security Number.
C–E
- CDFI (Community Development Financial Institution)
- A mission-driven lender certified by the US Treasury that serves underserved markets. CDFIs typically offer lower rates than private lenders but have longer timelines and more documentation requirements.
- Collateral
- Business or personal assets pledged to secure a loan. If you default, the lender can seize collateral. Revenue-based funding from Bankable does not require traditional collateral — a UCC-1 lien on business assets serves as the security position.
- EAD (Employment Authorization Document)
- Form I-766, issued by USCIS. The EAD authorizes a non-citizen to work for any US employer (including themselves) for the validity period shown on the card. The EAD is the primary immigration document required for Bankable Funds.
- EIN (Employer Identification Number)
- A 9-digit tax identification number issued by the IRS to business entities (XX-XXXXXXX format). Required for business bank accounts, business credit, and all business financing. Apply free at irs.gov.
- Equity Dilution
- The reduction in your ownership percentage that occurs when you give equity to an investor in exchange for capital. Revenue-based funding from Bankable involves zero equity dilution — you keep 100% of your business.
F–I
- Factor Rate
- The multiplier applied to a revenue-based advance to calculate total repayment. A $100,000 advance at a 1.25 factor rate requires $125,000 total repayment. Bankable's range: 1.15–1.45.
- Hold Back
- The percentage of daily or weekly revenue automatically debited to repay a revenue-based advance. Typical hold back: 6–15% of daily or weekly deposits.
- ITIN (Individual Taxpayer Identification Number)
- A 9-digit IRS number for individuals who cannot get an SSN. ITINs are personal — business entities use EINs. Non-citizens who are sole proprietors sometimes use ITINs; formal business entities always use EINs.
M–R
- MCA (Merchant Cash Advance)
- A type of business advance based primarily on credit card processing volume. MCAs are technically purchases of future credit card receivables. Similar to revenue-based funding but credit-card-volume specific.
- Personal Guarantee
- A contractual commitment making the business owner personally liable for business debt if the business cannot pay. Some Bankable products require personal guarantees; others do not. Clarify before signing.
- Revenue-Based Funding
- A financing structure where a lump sum is advanced and repaid as a fixed percentage of business revenue. Unlike loans, there's no fixed monthly payment — low-revenue months mean lower payments.
S–Z
- SBA (Small Business Administration)
- US government agency that provides government-backed business loans through approved lenders. As of March 1, 2026, SBA programs require US citizenship — non-citizens are excluded from all SBA products.
- Stacking
- Having multiple simultaneous MCA or revenue-based advances from different providers. Stacking is considered high-risk behavior by lenders and is a common disqualifier for new funding applications.
- Tranche Funding
- Capital disbursed in stages based on revenue milestones rather than in a single lump sum. Bankable offers tranche structures for businesses with variable or growing revenue needs.
- UCC-1 (Uniform Commercial Code Financing Statement)
- A public filing that establishes a lender's security interest in a borrower's business assets. Required for most business financing. A UCC-1 is not a judgment or legal action — it's a standard commercial security filing discharged when the advance is repaid.
- Work Authorization
- Legal permission to work in the United States. For most non-citizens, work authorization is established by an EAD. Some visa holders have inherent work authorization (H-1B, L-1, O-1). Required for Bankable Funds.
Frequently Asked Questions
USCIS.gov is the authoritative source for immigration terminology and EAD categories. The USCIS website provides plain-language explanations of all immigration documents and processes.
A factor rate is a simple multiplier applied once to the advance amount. An interest rate is calculated on the remaining outstanding principal over time. Factor rates are simpler but can be harder to compare to APR — divide the total fee by the advance amount and annualize it based on expected repayment timeline for an approximate APR comparison.
Grants are non-repayable funds from government or private foundations, typically for specific purposes. Loans (including revenue-based advances) must be repaid. Non-citizens have access to revenue-based advances from Bankable and limited grant opportunities from immigrant-focused foundations.
A secured loan has specific assets pledged as collateral. An unsecured loan has no specific collateral pledge. Revenue-based advances occupy a middle ground: a UCC-1 lien on all business assets serves as a general security interest without requiring specific asset pledges.
A pre-payment penalty is a fee charged if you repay your advance faster than expected. Most Bankable products do not have pre-payment penalties — paying off faster simply concludes the advance. Confirm this in your agreement.
A balloon payment is a large final payment due at the end of a loan term. Revenue-based advances typically do not have balloon payments — they are repaid gradually through the revenue percentage holdback until the factor amount is paid.
Personal credit (FICO score) reflects your personal borrowing history. Business credit (PAYDEX, Experian Business score) reflects your business's borrowing history. Non-citizens can build business credit without a green card or SSN through EIN-based business credit accounts.