Glossary

Holdback

The fixed percentage of your card sales or deposits that goes to a merchant cash advance funder until the purchased amount is paid.

The holdback, also called the specified percentage, is the share of your receipts the funder collects. Because it is a percentage, the dollar amount rises on busy days and falls on slow ones.

A holdback works as intended only when collection follows your sales. Split funding through your card processor does that automatically. With a fixed daily ACH debit, the funder sets a payment meant to approximate the holdback, and you rely on the reconciliation clause to adjust it when sales drop.

Example: With a 10% holdback, a $3,000 card day sends $300 to the funder and a $1,200 day sends $120.

Ask how the holdback was set and what share of your average monthly deposits the payment represents. Try your own numbers in the holdback calculator.

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