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Payoff quote
Also called balance letter, buyout number, payoff balance.
An indicative figure for what it would take to retire an existing position, given to a merchant or a competing funder and usually valid only for a short window.
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
Less formal than a payoff letter and often delivered by email or through a portal. It is the number a competing funder needs to size a buyout, and it drives most refinance and consolidation conversations.
What it contains depends entirely on the product. On an amortising loan, the payoff is the outstanding principal plus accrued interest to the date, plus any prepayment charge - so it is meaningfully less than the sum of remaining payments, because unaccrued interest falls away. On a factor-rate advance, the figure is very often the entire remaining purchased amount, because there is no unaccrued interest to remove. Some funders publish or negotiate an early payoff discount; many do not, and none are obliged to unless the contract says so.
Quotes go stale quickly, since payments continue to be collected while the buyout is arranged.
Where this one catches people
On an advance, ask explicitly whether the quote is discounted or is simply the remaining purchased amount. If it is undiscounted, refinancing buys nothing on that position - the new funder advances the full remaining figure and charges a factor rate on top of it, so the business pays a second cost to retire a first cost it had already fully incurred.
Worked through
Illustration. An advance with a $90,000 purchased amount, $52,000 collected to date. On an amortising loan the payoff would remove unaccrued interest. Here the quote is $38,000 - the full remainder, undiscounted.
A refinance advancing $38,000 to retire it at a factor rate of 1.35 creates a new obligation of $51,300 to extinguish a $38,000 obligation that already contained its entire cost. The payment schedule improves; the total owed rises by $13,300 with no new cash to the business.
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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Payoff quote — common questions
What does payoff quote mean?
An indicative figure for what it would take to retire an existing position, given to a merchant or a competing funder and usually valid only for a short window.
Where does payoff quote catch people out?
On an advance, ask explicitly whether the quote is discounted or is simply the remaining purchased amount. If it is undiscounted, refinancing buys nothing on that position - the new funder advances the full remaining figure and charges a factor rate on top of it, so the business pays a second cost to retire a first cost it had already fully incurred.
Is payoff quote the same as an interest rate?
Payoff quote 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 payoff quote apply to?
Merchant Cash Advance, Working Capital, Term Loan.
Is there a worked example of payoff quote?
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 payoff quote?
Double dipping, Payoff letter, Prepayment penalty, Purchased amount, Refinance.
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.