Holdback
The percentage of daily card sales a merchant cash advance funder withholds toward repayment; it rises and falls with your sales.
A holdback is the slice of your daily card-batch sales that a merchant cash advance funder automatically keeps toward repayment. If the holdback is 12%, then on a $3,000 card day the funder collects $360, and on a $1,000 day it collects $120. The dollar amount flexes with sales, which is the defining feature of a true holdback.
That flex cuts both ways. In a slow week you send less, which feels forgiving, but the term stretches and it can be hard to predict exactly when the advance retires. In a strong week you send more, which retires the balance faster but pulls more cash out of the account on your busiest days.
This is the main structural difference between a classic MCA holdback and a fixed weekly remittance. A holdback tracks card volume day to day; a weekly remittance is a set number you can plan around. Neither is automatically better — it depends on whether your business is card-heavy and how much predictability you need to run payroll and vendors.
Frequently asked
How is a holdback different from a fixed payment?
A holdback is a percentage of daily card sales, so the dollar amount changes every day with volume. A fixed weekly remittance is the same amount each week regardless of a single slow or strong day.
Does the holdback percentage change over time?
The percentage is typically set at signing, but the dollars collected change daily because they are a share of that day’s sales. Read your agreement to confirm how and when the rate can change.
Is a holdback the same as a factor rate?
No. The factor rate sets the total payback; the holdback is the collection mechanism that determines how quickly you reach it. A deal has both.
Related terms
A purchase of future card sales repaid through a daily holdback on card batches — the classic fast-funding product.
A fixed weekly payment pulled by ACH toward your total payback — more predictable than a daily card holdback.
A repayment pulled automatically from your business bank account through the ACH network on a set schedule.
A decimal multiplier (like 1.30) applied to the funded amount to calculate total payback — it is not an interest rate or APR.
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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