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Payment frequency
Also called remittance frequency, debit frequency, payment schedule.
How often payments are taken - daily on banking days, weekly, biweekly or monthly - which changes both the cash-flow burden and the effective cost even when the total repaid is identical.
Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.
What it means
Three points about the arithmetic that offers rarely spell out.
Daily means banking days, not calendar days. A month contains roughly twenty to twenty-three banking days depending on weekends and holidays, so a daily debit multiplied by twenty-one approximates the monthly outflow - and holiday-heavy months are lighter, which slides the estimated end date.
Weekly means fifty-two payments a year, not forty-eight. Four months of the year carry five weekly debits, and businesses budgeting weekly payments as "monthly divided by four" are short one payment in each of those months.
Faster frequency raises effective annualised cost even when total dollars are unchanged, because the money is returned sooner. Two advances with the same purchased amount and the same purchase price are not equally priced if one collects daily and the other monthly.
Frequency also carries a structural implication in advances. Daily collection tracks receipts more closely, which supports the purchase characterisation; monthly collection of a fixed sum looks more like a loan payment.
Where this one catches people
Comparing offers by payment size is the fastest way to pick the wrong one. Compare total dollars repaid and the number of days over which they are collected. A smaller daily payment over a longer term can cost more in total and more per day than a larger weekly one.
Worked through
Illustration. Offer A: $70,000 purchased amount, $700 a day over roughly 100 banking days - about $14,700 a month, done in five months. Offer B: $70,000 purchased amount, $3,000 a week over 24 weeks - about $13,000 a month, done in six months.
Same total repaid. Offer B is easier on cash flow and cheaper in annualised terms because the same fixed cost is spread over more time. Nothing in the per-payment figures makes that visible.
Figures in the example are illustrative. They show the arithmetic, not a quote — what any one lender would charge is on that lender's page, where it is published at all.
Where you will meet this term
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Payment frequency — common questions
What does payment frequency mean?
How often payments are taken - daily on banking days, weekly, biweekly or monthly - which changes both the cash-flow burden and the effective cost even when the total repaid is identical.
Where does payment frequency catch people out?
Comparing offers by payment size is the fastest way to pick the wrong one. Compare total dollars repaid and the number of days over which they are collected. A smaller daily payment over a longer term can cost more in total and more per day than a larger weekly one.
Is payment frequency the same as an interest rate?
Payment frequency is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.
Which products does payment frequency apply to?
Merchant Cash Advance, Working Capital, Term Loan, Revenue-Based Financing.
Is there a worked example of payment frequency?
Yes, on this page, and it is labelled illustrative. It shows the arithmetic, not a quote from any lender.
What else should I read alongside payment frequency?
Annual percentage rate, Factor rate, Minimum payment, Purchased amount, Reconciliation.
Has this definition been checked?
Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.
Is this legal advice?
No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.
Can I suggest a term?
Yes — [email protected]. The glossary grows from what people are actually shown in contracts.