Buy Rate
The base factor rate an underwriting desk assigns to a deal before any broker markup — the wholesale cost of the advance.
The buy rate is the base factor rate an underwriting desk is willing to fund a deal at, before any broker or ISO adds a markup. If the buy rate is 1.28 and a broker sells the deal at 1.40, the difference is the broker’s margin. The "sell rate" is what you actually sign.
Understanding the buy rate matters because it is where negotiation and relationship pricing live. A clean file — steady deposits, strong time in business, no messy stacking — earns a lower buy rate because it is lower risk to the desk. A broker with room in the markup may have flexibility on the sell rate.
The most reliable way to improve your effective rate over time is performance. Operators who size the first deal honestly and repay cleanly tend to see better pricing on a renewal, because fresh, observed bank-statement performance carries more weight than a static credit score. That is relationship pricing in practice — you earn a better rate on the math, not on negotiation alone.
Frequently asked
What is the difference between a buy rate and a factor rate?
The buy rate is the wholesale base factor rate from the underwriting desk. The factor rate you sign (the sell rate) can include a broker markup on top of the buy rate.
Can I negotiate the buy rate?
You generally cannot change the desk’s buy rate, but a stronger file lowers it, and there may be room in the markup between buy and sell rate. A clean, well-documented file is your best leverage.
Does repaying cleanly improve my rate later?
Often, yes. Observed repayment on a first deal is weighted heavily, so a clean cycle tends to earn better pricing on a renewal. This is how relationship pricing works.
Related terms
A decimal multiplier (like 1.30) applied to the funded amount to calculate total payback — it is not an interest rate or APR.
The full dollar amount you repay over the life of an advance — funded amount times the factor rate, plus any fees.
Taking new capital from your existing funder — typically around 50% paid down — that pays off the current balance and adds funds on top.
An upfront fee some funders deduct to set up an advance, which reduces the net amount you actually receive.
Funding repaid as a set remittance tied to your revenue and cash flow rather than a fixed bank-style monthly loan payment.
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