Key Takeaways
- Revenue-based funding provides a lump-sum advance repaid as a percentage of daily/weekly deposits
- No green card, citizenship, or permanent residency required—SSN + EIN + revenue qualifies
- Factor rates (1.15x–1.45x) are disclosed upfront—no hidden fees or compound interest
- Repayment automatically scales with your revenue—slower months mean smaller payments
- Revenue-based funding is not equity—you retain 100% ownership of your J-1 business
Revenue-based funding (sometimes called revenue-based financing, merchant cash advance, or business cash advance) is a form of business capital where a company receives a lump-sum payment in exchange for agreeing to repay a fixed multiple of that amount from a percentage of future revenue. For J-1 visa holders, it is the most accessible capital structure in 2026 because it evaluates business performance rather than citizenship status.
How Revenue-Based Funding Works: Step by Step
- You apply through Bankable’s 5-minute Bankability Score application
- We evaluate your business bank statements, monthly revenue, and operating history
- We offer an advance amount, a factor rate, and a repayment percentage
- You sign the funding agreement and receive capital in your business account
- Repayment begins as a fixed percentage of daily or weekly bank deposits
- Balance retires when the total factor amount is paid (advance x factor rate)
The Factor Rate: Understanding the Cost
Unlike interest rates (which compound and can be calculated in different ways), factor rates are simple multipliers applied to your advance amount. Here’s how to calculate the total cost:
| Advance Amount | Factor Rate | Total Repayment | Total Cost |
|---|---|---|---|
| $50,000 | 1.20x | $60,000 | $10,000 |
| $100,000 | 1.25x | $125,000 | $25,000 |
| $250,000 | 1.30x | $325,000 | $75,000 |
| $500,000 | 1.35x | $675,000 | $175,000 |
How the Repayment Percentage Works
The repayment percentage (typically 8–18% of daily deposits) determines how quickly you retire the balance. Here’s an example:
- Advance: $100,000 at 1.25x = $125,000 total repayment
- Repayment rate: 12% of daily deposits
- Daily deposits: $5,000 average
- Daily repayment: $600 (12% x $5,000)
- Time to repay: approximately 208 days (~7 months)
Get a personalized estimate for your J-1 business with your Bankability Score. Compare revenue-based funding to traditional loan structures in our capital options guide.
Revenue-Based Funding vs. Equity for J-1 Founders
For J-1 startup founders, a key decision is whether to take revenue-based capital or give up equity to venture investors. Revenue-based funding has a fixed cost (the factor amount) and no ongoing ownership dilution. Equity has no fixed cost but permanently reduces your ownership percentage. For businesses with predictable revenue, revenue-based funding is typically more economical over a 3–5 year horizon—especially for founders who expect their business to grow significantly in value.
Frequently Asked Questions
A traditional loan has a fixed interest rate, fixed monthly payment, and a defined term. Revenue-based funding has a fixed factor rate and a flexible repayment that scales with your actual deposits. Traditional loans are better if you have predictable revenue and want to minimize total cost; revenue-based funding is better when you need flexibility or can’t access traditional loans due to visa status.
Revenue-based funding and MCAs are structurally similar (advance repaid as % of revenue) but differ in implementation. MCAs technically purchase future receivables and repay from credit card transactions specifically. Bankable’s program is a business advance repaid from all bank deposits—not limited to credit card volume. Our terms are also more transparent than many MCA products.
Factor rates for J-1 businesses typically range from 1.15x to 1.45x depending on your business age, revenue consistency, and industry. A business with 12+ months of strong, consistent revenue will qualify for rates at the lower end of the range.
Factor rates are determined by underwriting based on your business’s risk profile. There is limited negotiation on factor rates, but the repayment percentage (which affects how quickly you repay) can sometimes be adjusted based on your cash flow preferences.
No. Factor rates do not compound. The cost is fixed at the time of the advance. If you repay in 6 months or 12 months, the total amount you repay is the same (advance x factor rate). Only the speed of repayment changes—not the total cost.
Yes. Higher deposits mean higher daily/weekly payments, which retire your balance faster. Early retirement at the full factor amount means you paid more quickly but the same total. Bankable does not charge penalties for early repayment.
Bankable generally requires the first advance to be substantially retired (80%+) before issuing a second advance. Some high-revenue businesses may qualify for a second advance sooner—contact our team to discuss your specific situation.
Bankable reports to business credit bureaus (D&B, Equifax Business), not to personal credit bureaus (Equifax, Experian, TransUnion) typically. This means your revenue-based funding activity builds business credit without affecting your personal credit score.
Bankable charges an origination fee (typically 1–2% of the advance amount) that is disclosed upfront in your funding agreement. There are no monthly maintenance fees, prepayment penalties, or hidden charges. The total cost is advance amount x factor rate + origination fee.
The repayment percentage determines the term implicitly. A higher percentage (18%) means faster repayment (shorter term). A lower percentage (8%) means slower repayment (longer term). For a given advance and factor rate, the total cost is the same regardless of percentage—only the timing changes.