The only restriction on what pilot squadron you can join is that you can't be a Rebel on the ground and an Imperial in space, or vice versa. I don't know if faction points matter.
It was several months ago, last year actually, when I swithced from Rebel Colonel to Imperial. I think I got up to Seargent before I quit that and started back to Rebel again. It took a few weeks to grind out that much faction, especially as it was pre JTL so no space faction farming. But I didn't have anything better to do.