Merchant cash advance terms, defined.

The words you'll see in an offer, an agreement and a payoff letter, in plain English.

ACH debit: An electronic withdrawal from your bank account. Remittances are collected by ACH.
Average daily balance: The average amount in your account each day over a period. Underwriters use it to gauge your cash cushion.
Commercial financing disclosure: A standardized summary of an offer's terms that certain states, such as New York and California, require before you sign.
Deal ID: The unique reference number on your agreement. Use it for balance lookups and requests.
Default: A breach of the agreement as defined in it, such as blocking remittances or closing the account without notice.
Direct funder: A company that funds advances from its own capital and makes its own decisions, as opposed to a broker.
Factor: The multiplier applied to the purchase price to determine the purchased amount, for example 1.30.
Good-through date: The last day a payoff amount in a payoff letter is valid.
Guaranty of performance: An owner's promise that the business will follow the agreement. It covers the business's obligations, not its sales.
ISO: Independent sales organization: a broker or partner that refers businesses to funders.
Month-to-date (MTD): Bank activity from the start of the current month to today.
NSF / returned item: A payment returned for non-sufficient funds.
Payoff letter: A written statement of the amount needed to satisfy an advance, with a good-through date and payment instructions.
Position: The order of an advance relative to others open at the same time: first position, second position, and so on.
Purchase price: The amount the funder pays the business up front, less any disclosed fees.
Purchased amount: The total dollar amount of future receivables sold to the funder. It is fixed when the agreement is signed.
Receivables: Money owed to your business by customers, including card sales, checks and transfers.
Reconciliation: An adjustment of the remittance to match the receivables you actually collected, under the agreement.
Remittance: Each daily or weekly payment delivering the purchased receivables to the funder.
Renewal: A new advance for an existing client, often paying off the remaining balance and providing additional funds.
Specified percentage: The share of receivables the business agrees to deliver until the purchased amount is remitted.
Stacking: Having more than one advance open at the same time.
UCC financing statement: A public filing that records the funder's interest in the purchased receivables. It is terminated once the advance is satisfied.
Underwriting: The review of your application and bank statements that determines whether and how much to fund.

Merchant cash advance terms, defined.

Ready when your business is.