Every term in your agreement, explained without the jargon.
Advance agreements are dense with terms that are rarely explained. Here are the ones that matter most, in plain language.
A flat multiplier applied to the amount advanced to determine total payback. 1.40 means you repay 140% of the advance. It is not an interest rate and does not decrease with faster repayment.
The percentage of daily card sales a funder withholds to service the advance. Unlike a fixed debit, it flexes with your sales volume.
A fixed amount automatically withdrawn from your account on each business day or week, regardless of sales.
Taking on a new advance while one or more existing advances are still being repaid, creating parallel debits.
A public filing granting the funder a security interest in specified business assets, often receivables.
A clause in which the borrower pre-agrees that a court may enter judgment on a claimed default with limited process. Heavily scrutinized in recent years.
A provision allowing debit amounts to be adjusted to actual sales — valuable if genuinely honored.
The factor rate a broker obtains from a funder versus the (higher) rate offered to you; the difference is broker compensation.
The agreed share of receivables the advance is nominally purchasing — the legal framing that distinguishes an advance from a loan.
A specialist will walk through your specific advances with you and lay out the real numbers in plain language.
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