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Specified percentage
Also called purchased percentage, specified amount, percentage of receivables.
The share of a business's future receipts that a merchant cash advance agreement says has been purchased — the figure the daily or weekly debit is supposed to be an estimate of.
Drafted with AI assistance and checked by a person. Its factual claims were verified against the sources listed at the end, by Find Me Funders research desk.
What it means
The structure of an advance is a sale: the funder buys a stated percentage of future receivables until a purchased amount has been delivered. Because nobody can debit a percentage of a number that does not exist yet, the contract sets an estimated fixed payment based on historical revenue, and states that this fixed payment is a good-faith approximation of the specified percentage.
The reconciliation clause is the bridge between the two. It is the mechanism by which the estimate is checked against actual receipts and adjusted — refunding over-collections or lowering the debit going forward. Whether it operates automatically or only on written request with supporting statements is set by the contract and varies materially between funders.
This is not a drafting curiosity. The presence of a real specified percentage, a real reconciliation right, and repayment genuinely contingent on receipts is central to why courts in several states have treated these agreements as purchases rather than loans. The percentage is load-bearing for the legal characterisation, not decoration.
Where this one catches people
The fixed daily debit is not the specified percentage. It is an estimate of it, and an estimate is only corrected if somebody corrects it. A merchant whose revenue halves is contractually entitled to a payment reflecting the specified percentage of actual receipts, but in a contract requiring written request and funder approval, the estimate silently becomes the operative payment. Most merchants never invoke the clause, and most funders do not volunteer it.
Worked through
Illustrative only. Agreement purchases 12 percent of receipts. At the time of underwriting the business took $200,000 a month, so 12 percent is about $24,000 a month, set as a daily debit of roughly $1,140 across 21 business days. Revenue drops to $90,000 a month. The specified percentage now equals about $10,800 a month, but the debit is still $1,140 a day — roughly 27 percent of actual receipts until reconciliation is requested and granted.
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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Sources and checks
Every figure on this page traces to a document someone read, on a date. Where a check is past its review date it says so rather than passing as current.
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12% of $200,000 a month is $24,000, about $1,140 a day over 21 business days; at $90,000 a month the same debit is roughly 27% of actual receipts
example200,000 x 0.12 = 24,000; 24,000 / 21 = 1,142.86, i.e. roughly 1,140 a day. 90,000 x 0.12 = 10,800, the contractual specified percentage. The unchanged debit collects 1,140 x 21 = 23,940 a month, and 23,940 / 90,000 = 26.6%, i.e. roughly 27% of actual receipts.
Specified percentage — common questions
What does specified percentage mean?
The share of a business's future receipts that a merchant cash advance agreement says has been purchased — the figure the daily or weekly debit is supposed to be an estimate of.
Where does specified percentage catch people out?
The fixed daily debit is not the specified percentage. It is an estimate of it, and an estimate is only corrected if somebody corrects it. A merchant whose revenue halves is contractually entitled to a payment reflecting the specified percentage of actual receipts, but in a contract requiring written request and funder approval, the estimate silently becomes the operative payment. Most merchants never invoke the clause, and most funders do not volunteer it.
Is specified percentage the same as an interest rate?
Specified percentage 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 specified percentage apply to?
Merchant Cash Advance, Revenue-Based Financing.
Is there a worked example of specified percentage?
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 specified percentage?
Cash advance, Daily debit, Reconciliation, True-up, Usury.
Has this definition been checked?
Yes. Its claims were verified against the sources listed at the end of this page, and the reviewer is named.
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.