Glossary
Business funding glossary
Plain-English definitions of the terms you'll see in a receivables purchase agreement and across this site.
- Merchant cash advance (MCA)
- A commercial transaction in which a funder purchases a specified amount of a business's future receivables at a discount, paying a Purchase Price upfront. Not a loan; no interest or fixed term.
- Purchase Price
- The amount the funder pays the merchant upfront to purchase the Specified Amount of future receivables. This is the capital the business receives.
- Specified Amount (Purchased Amount)
- The total dollar amount of future receivables the funder has purchased and will receive through remittances.
- Receivables
- Revenue a business is due to receive from customers — card sales, invoices, deposits. The asset being sold in a receivables purchase.
- Remittance
- The periodic delivery of purchased receivables from the merchant to the funder, typically as a fixed daily or weekly amount estimated from revenue, subject to reconciliation.
- Reconciliation
- A contractual mechanism allowing the remittance amount to be adjusted to reflect the merchant's actual receivables when revenue changes materially. A defining feature that distinguishes a purchase from a loan.
- Factor rate
- A multiplier (e.g., 1.25) expressing the Specified Amount as a proportion of the Purchase Price. It is not an interest rate and does not accrue over time.
- Holdback
- In split-funded structures, the percentage of card sales delivered to the funder until the Specified Amount is satisfied.
- Position
- An existing receivables purchase or financing arrangement a business has in place. First position, second position, etc. refer to order of origination.
- Stacking
- Taking additional advances while others remain outstanding. Many agreements restrict it; always disclose existing positions when applying.
- Underwriting
- The review of a business's revenue, deposits, cash flow, time in business, industry, and positions to determine eligibility and structure.
- Bank statements
- The primary underwriting document — typically the last 3–4 months of business bank activity showing deposits and balances.
- Time in business (TIB)
- How long a business has been operating. A key sizing input alongside revenue.
- Same-day decision
- An underwriting determination returned within the same business day for a complete file. Describes typical experience, not a commitment.
- Personal guaranty of performance
- A guaranty that the merchant will perform its obligations (e.g., not divert receivables or breach representations). Distinct from a guaranty of repayment, which is a loan feature.
- Confession of judgment (COJ)
- A clause allowing a creditor to obtain judgment without trial. Restricted or prohibited in several states; InstaFunding does not rely on COJs.
- Commercial financing disclosure law
- State statutes (e.g., NY, CA, CT, UT, VA, TX, FL, GA, KS, MO) requiring standardized disclosures for certain commercial financing offers, including receivables purchases.
- Not a lender
- InstaFunding LLC purchases receivables; it does not originate, broker, or service loans. Term loans referenced on this site are offered only by a separate, independently licensed Utah entity.
- ISO (independent sales organization)
- A broker or referral partner that introduces merchants to funders. See our partner program.
- Renewal
- An additional receivables purchase offered to a merchant with a strong remittance history, evaluated through underwriting.
Capital moves at the speed of decision.
Same-day decisions. Funding in as little as 24–48 hours.
Get funded nowAll funding is contingent on underwriting review and approval. Terms vary by business. Information on this site is illustrative only and not a commitment to purchase receivables or provide financing. A merchant cash advance is a purchase of future receivables — not a loan.