Glossary
The share of daily sales or deposits taken as the payment on some advances.
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The share of daily sales or deposits taken as the payment on some advances.
Payment equals sales multiplied by the holdback percentage. A 10% holdback on $3,000 of daily sales is $300. The higher the percentage, the faster the payback and the larger each payment.
It decides both the daily burden and the time to repay.
At $62,500 payback and $300 a day, repayment takes about 208 business days.
Common on card-sales advances. Deposits-based advances may use a fixed debit instead.
A holdback of 8% looks small, but a funder reads it against the margin the business actually keeps. An 8% share of daily sales in a business with 6% net margin is eating more than the profit, which is why sizing the holdback against margin matters more than the headline percentage.
Owners sometimes assume a lower holdback always means a cheaper deal. A lower percentage simply stretches the same payback over more days, so the total is unchanged.
It repays faster but takes more each day. Whether that is better depends on your margins.
See the related guides and the comparison pages, or apply and ask.
No. It is educational information, and agreements vary.
Educational information only. It is not legal, tax or accounting advice.
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