Which funding products does this apply to?

Merchant Cash Advance, Revenue-Based Financing. Each has its own page listing the funders in this directory that offer it and what each one publishes about its terms.

Are the figures here quotes?

No. Every worked example is labelled illustrative and exists to show the arithmetic. What a particular lender charges is on that lender's page, where it publishes it at all.

The Find Me Funders research desk. Some drafting is AI-assisted, and every page that is says so at the top, including whether a person has checked its claims yet.

How do I know a figure here is right?

Where a page carries the green notice, its claims were checked against the sources listed at the end and a reviewer is named. Where it carries the amber one, nobody has verified it yet and you should confirm anything you plan to act on.

Are the examples real deals?

No. Every worked example is labelled illustrative and exists to show the arithmetic. What any particular lender charges is on that lender's page, where it publishes it.

Why do you never say what a typical rate is?

Because we cannot source it. A market average assembled from lenders who do not publish prices is a guess with a decimal point on it. Where a lender publishes a figure, we show that figure and say where it came from.

Is this financial or legal advice?

No. It is general information about how these products work. Outcomes depend on your contract and your state, and a lawyer or accountant licensed where you are is the person to ask about your situation.

Can I reuse this content?

Quote a paragraph with a link back. Do not republish whole articles.

Purchase of future receivables: what an MCA contract actually does

What you actually sold: inside a purchase of future receivables

The document is drafted as a sale of money you have not earned yet, and almost every strange feature of the deal follows from that one drafting decision.

By Find Me Funders research desk Updated 14 September 2026 1039 words 5 min read

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.

Somewhere in the first page of the agreement there is a sentence saying the funder is buying a stated dollar amount of your future receipts, and that the transaction is a purchase and not a loan. Read that sentence twice. Almost everything that later surprises people about a merchant cash advance is downstream of it.

The three numbers that define the sale

The purchased amount.The dollar figure of future receipts the funder is buying. This is what you owe in substance, though the contract will avoid the word "owe". It does not go up or down with time. There is no principal that shrinks and no interest that accrues.

The purchase price.What the funder pays you for those receipts. This is the money that arrives, before any fees withheld at funding. The difference between the purchased amount and the purchase price is the entire stated cost of the deal.

The specified percentage.The share of each day's or week's receipts the funder is entitled to collect until the purchased amount has been delivered. In most agreements this percentage is then converted into an estimated fixed dollar debit, and the fixed debit is what your bank account actually sees.

Illustrative only — suppose a funder buys $67,500 of your future receipts and pays you $50,000 for them. The stated cost is $17,500. If it is collected over five months, that is a different animal from the same $17,500 collected over eighteen. The factor tells you nothing about which one you signed.

Why the paperwork insists it is a purchase

Lending is a regulated activity. Interest rates run into usury statutes, lender licensing regimes and disclosure obligations that vary by state. The sale of an asset generally does not.

So the agreement is drafted, clause by clause, to look like a sale of property rather than an extension of credit. There is no maturity date. There is no stated interest rate. There is no fixed schedule of instalments in the classic sense. The funder takes an assignment of and a security interest in the receivables. And crucially, the contract will say that if your business fails honestly — no fraud, no diversion, no breach — the funder loses its money and has no claim for the shortfall. That last feature is the load-bearing one. A lender that must be repaid whatever happens is lending. A buyer that eats the loss when the asset never materialises has bought something.

What courts look at, and why nobody can promise you an answer

Whether a given agreement is treated as a purchase or recharacterised as a loan is decided case by case, on the specific contract and the specific conduct, and the law is not uniform across states. Courts that have addressed the question have tended to circle the same three features:

Whether the agreement contains a genuine reconciliation mechanism that adjusts collection to actual receipts.
Whether the arrangement has a finite term, or is genuinely open-ended until the receipts arrive.
Whether the funder has recourse against the business or the owner if the business fails without fraud.

Conduct matters as much as drafting. A reconciliation clause that exists on paper and is refused in practice is worth less than one that is honoured. Do not assume the label on the document settles the question either way, and do not assume the opposite.

What the purchase framing does to you in practice

There is no payoff discount by default.You do not owe a shrinking balance. You owe the purchased amount. Paying it off in half the time usually costs exactly the same dollars, which means it costs far more per month. Any early-payoff discount has to be written into the deal before funding.

The personal guarantee is usually of performance, not of payment.You are not promising to repay a loan. You are promising that the business will not do the specific things the contract forbids — block the debit, close, divert receipts, take another position, lie on the application. Breach any of those and the balance typically becomes yours personally.

A UCC-1 gets filed.Even though the deal is styled as a purchase, funders routinely file a financing statement under UCC Article 9 covering receivables and often all business assets. It is public, other funders read it, and it can hold up a bank line or an SBA loan until it is released.

There is no APR on the document.An APR needs a time dimension and the contract deliberately has none. You can compute one, but only by fixing and stating an assumed term, and the answer moves sharply when the term moves.

Anti-stacking clauses have teeth.Because the funder bought the receipts, selling the same receipts again is not merely a covenant breach in its eyes. It is closer to selling the same car twice.

The sentence to read before you sign

Find the clause that says what happens if the business genuinely fails. If it says the funder bears that loss, the document is at least internally consistent with what it claims to be. If it says you or your guarantee cover the shortfall in all events, the deal is asserting one thing and doing another, and that gap is exactly where disputes start.

The gap between the percentage and the debit, in numbers

Illustrative only — a specified percentage of 15%, and an estimated daily debit built on an assumption that you take $98,000 a month across 21 collection days. Fifteen percent of $98,000, divided by 21, is $700 a day. That is the figure in the document.

Now suppose actual receipts are $74,000. The true 15% is $528.57 a day. The debit is still $700, which is $171.43 a day too much, or $3,600 over a 21-day month — and as a share of what you actually took, the funder is collecting 19.86% rather than the 15% the contract specifies.

That single gap is the whole reconciliation question expressed as a number. It is also the number to put in a reconciliation request, because closing it is precisely what the clause exists to do. See reconciliation: the clause that decides what happens in a bad month.