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Common Merchant Cash Advance Terms Explained

February 27th, 2013 | Posted by CillianO in Merchant Cash Advance

business cash advanceAs part of our dedication to transparency and quality customer service, here are some of the most common merchant cash advance terms explained:

Business or Merchant Cash Advance Provider: A business e.g. Infinity Capital Funding that essentially purchases the future credit card sales of another business in exchange for an upfront cash payment.

Advance Amount: The amount of cash given to a business upfront in exchange for a percentage of the business’ future credit card sales. At Infinity Capital Funding, advances up to 125% of monthly credit card sales are available.

Factor Rate (also called Provider Fee): The factor rate is the percentage of the business cash advance amount that the merchant cash advance provider charges in exchange for the cash advance.

Daily Retrieval Rate: This is the amount a merchant cash advance provider collects from daily credit card sales. This is usually expressed as a percentage and allows the business receiving the cash advance to determine how soon it will be able to pay off the cash advance.

Safe Retrieval Rate:¬†This refers to the daily retrieval rate as a percentage, which is the portion of daily sales that can be used for daily repayment ¬†(are “safe”) while leaving the business with sufficient cash flow to sustain itself.

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