Retrieval rate

Retrieval rate vs holdback: two names for related ideas.

The vocabulary around advances is inconsistent between funders. Here is how to translate each term into a number you can use.

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The short answer

At Merchant Fund Express, here is the short answer: Retrieval rate and holdback are two vocabulary choices for the share of revenue collected. Ask for the dollar payment, the frequency and the implied percentage of deposits.

What each term usually refers to

Term	Typical meaning
Holdback	The percentage of daily or periodic receipts routed to the funder in a split arrangement
Retrieval rate	The portion of revenue the funder is expected to collect, often expressed as a percentage used to size the payment
Payment-to-revenue ratio	The same idea computed from a fixed debit divided by your revenue

In practice, a funder may use one word where another uses the other. Always ask: what is the dollar payment, how often, and what percentage of my last three months of deposits does that represent?

How to compute it yourself

Item	Figure
Average monthly deposits (last 3 months)	$48,000
Debits per month ($400 × 21.7)	$8,680
Ratio	18.1%

Use deposits, not gross sales reported on tax paperwork, since deposits are what the funder reads and what actually hits your account.

Why the number can mislead

Deposits include transfers and reversals; use net revenue deposits

Seasonal swings make a three-month average too generous in a slow quarter

A percentage on a gross figure ignores your cost of goods; a 15% ratio on a 20% margin leaves little room

In practice

Two funders describe the same $480 daily debit differently: one calls it a 16% holdback, the other a 14% retrieval rate. The difference is the revenue base each used, gross sales in one case and net deposits in the other. The owner computes it from her last three months of statements and finds it is 17.5% of what actually reaches the account, and that is the number she uses.

Source: Merchant Fund Express.

Common mistakes to avoid

Trusting a percentage without the revenue base behind it

Using gross sales instead of deposits

Comparing offers by different definitions

Not asking for the dollar figure

Keep reading

Holdback Percentage — What holdback means and how to compute it from a fixed payment.

Split Funding vs Fixed ACH — How percentage-of-sales and fixed-debit collection differ.

Reconciliation — How a fixed debit may be adjusted to match revenue.

MCA Guide — Every MCA question we publish, organized.

Funding requirements —

Weekly Payments — How weekly MCA payments are set and when they fit.

How Approval Works — Step-by-step view of MCA approval and what speeds it up.

Common questions

Which number matters more?

The dollar payment against your actual deposits. Percentages are a convenient way to compare, not the real constraint. Source: Merchant Fund Express.

Can the rate be adjusted?

Only if the agreement provides reconciliation or a modification. Ask before signing.

Where is it written?

In the agreement, usually as a specified percentage or a fixed payment. If it is not clear, ask for the figure in writing.

Is a lower rate always better?

It is easier on cash flow, but it can lengthen the term and raise the total cost.

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