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Funding glossary

Business Funding Glossary

The terms lenders and brokers use — explained in plain English, from an operator’s point of view. Understand what you are actually signing before you sign it.

A B C D E F H I M N O P R S T U W

A

Accounts Receivable Financing

Borrowing against your outstanding invoices while you keep ownership and continue collecting from customers yourself.

ACH Remittance

A repayment pulled automatically from your business bank account through the ACH network on a set schedule.

B

Bank Statement Underwriting

Evaluating a business by reading its bank statements — deposits, balances, and account behavior — rather than relying on credit alone.

Bank Verification

Confirming your business bank account — often via a read-only connection like Plaid — so a funder can see cash flow and fund you.

Business Line of Credit

A revolving credit limit you can draw from, repay, and reuse — flexible, but often slower to set up and qualify for.

Business Purpose

The requirement that funds be used for commercial purposes, not personal or household use — central to commercial financing.

Buy Rate

The base factor rate an underwriting desk assigns to a deal before any broker markup — the wholesale cost of the advance.

C

Cash Flow Underwriting

An approval approach that weighs your real deposit activity and cash flow over the owner’s credit score.

Confession of Judgment (COJ)

A clause where a business owner pre-agrees to a court judgment on default, waiving the right to contest it first.

Credit Pull (Soft vs Hard)

A check of your credit; a soft pull generally does not affect your score, while a hard pull can lower it slightly.

D

Debt Consolidation

Combining multiple advances or debts into a single new facility with one payment — often used to escape a stack.

E

Early Payoff Discount

A reduction in total payback that some funders offer if you repay your advance ahead of schedule.

EIN (Employer Identification Number)

A federal tax ID the IRS issues to a business — used to verify identity and keep business finances separate from personal.

Equipment Financing

Funding to buy a specific machine or vehicle, usually secured by that equipment and repaid over its useful life.

F

Factor Rate

A decimal multiplier (like 1.30) applied to the funded amount to calculate total payback — it is not an interest rate or APR.

H

Holdback

The percentage of daily card sales a merchant cash advance funder withholds toward repayment; it rises and falls with your sales.

I

Invoice Factoring

Selling unpaid invoices to a factor at a discount for immediate cash, with the factor often collecting from your customer.

M

Merchant Cash Advance (MCA)

A purchase of future card sales repaid through a daily holdback on card batches — the classic fast-funding product.

N

Net-30

Payment terms that give a customer 30 days from the invoice date to pay the balance in full.

Net-60

Payment terms that give a customer 60 days from the invoice date to pay — roughly double the cash-flow gap of net-30.

NSF (Non-Sufficient Funds)

A bank event when an account lacks the money to cover a transaction, triggering a returned payment and a fee.

O

Origination Fee

An upfront fee some funders deduct to set up an advance, which reduces the net amount you actually receive.

P

Personal Guarantee

A promise by the business owner to be personally responsible for the obligation if the business cannot pay.

Purchase of Future Receivables

A financing structure where a funder buys a set amount of your future sales at a discount today — a sale, not a loan.

R

Renewal

Taking new capital from your existing funder — typically around 50% paid down — that pays off the current balance and adds funds on top.

Revenue-Based Financing

Funding repaid as a set remittance tied to your revenue and cash flow rather than a fixed bank-style monthly loan payment.

S

SBA Loan

A bank loan partially guaranteed by the U.S. Small Business Administration — low cost, but slow and document-heavy.

Stacking

Taking a second (or third) advance on top of an existing one, so multiple remittances hit the same deposits at the same time.

T

Time in Business

How long your business has been operating, usually measured from formation or first revenue — a core eligibility signal.

Total Payback

The full dollar amount you repay over the life of an advance — funded amount times the factor rate, plus any fees.

U

UCC-1 Filing

A public notice a funder files with the state to record a security interest in your business assets or receivables.

W

Weekly Remittance

A fixed weekly payment pulled by ACH toward your total payback — more predictable than a daily card holdback.

Working Capital

The cash a business uses to cover day-to-day operations — payroll, inventory, and the timing gaps in between.

Ready to put the terms to work?

Compare structures on total payback and cadence, then see a real offer for your business. Quickie funding is a purchase of future receivables for a business purpose — not a consumer loan.

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