Glossary
You do not need the whole dictionary. You need about fifteen terms, and they are the ones that move money.
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| Term | Plain meaning |
|---|---|
| Factor rate | A fixed multiple of the advance. 1.3 on $50,000 means repaying $65,000 |
| APR | Annualised cost of borrowing — useful between similar loans, misleading against a factor rate |
| Holdback | The share of daily card or deposit volume remitted |
| Origination fee | Deducted from what you receive, so you get less than the stated amount |
| Total repayment | Every dollar you return. The only figure that compares across structures |
| Term | Plain meaning |
|---|---|
| Personal guarantee | You are personally liable if the business cannot pay |
| UCC-1 filing | A public claim against business assets; affects later funding |
| Confession of judgment | Waives your right to contest a claim in court |
| Cross-default | Default on one facility triggers default on another |
| Reconciliation | The clause that lets payments adjust when revenue falls |
| Term | Plain meaning |
|---|---|
| Position | Where a funder ranks if things go wrong. Second position costs more than first |
| Stacking | Taking additional funding while an existing facility is open |
| Renewal | Replacing a facility before it is paid off; resets the term and usually total cost |
| Reverse consolidation | A facility that lowers the daily payment and extends the term — it does not pay off existing balances |
| Advance | A purchase of future receivables, not a loan |
Reverse consolidation is the term most often misdescribed. It reduces what leaves your account each day and stretches how long you pay. It does not pay off, consolidate or buy out your existing advances, and anyone describing it that way is not describing the product accurately. Full list in the glossary.
A factor rate is a fixed multiple set at the outset. Interest accrues over time and falls as the balance reduces.
The percentage of daily card or deposit volume taken as repayment.
No. It lowers the payment and extends the term. The balances remain.
Total repayment in dollars, then the first payment date.
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