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 weekly remittance is a planned amount sized to your sales — it does not swing with a single slow or strong day, and it can be reviewed if sales genuinely drop.
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 predictable weekly amount, sized to a percentage of your sales and pulled by ACH toward your total payback — steadier 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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