Deltagrove Loans passes the request to providers, who set any offer.
An advance is bought from future card sales and collected as a daily share until the agreed amount is in. The invented cases run one advance at three levels of daily card sales, show why the factor cost stays fixed, walk a week of holdbacks and turn an offer into a factor.
At a glance
- Collected from
A set share of daily card sales
- Full-service restaurants, Brown County, TX
30 employer establishments (CBP 2023)
- Accommodation and food services, ZIP 76801
70 employer establishments (ZBP 2023)
Kitchen payroll at a Brownwood, TX sit-down restaurant: one advance at three levels of daily card sales
A sit-down restaurant that needs cash for kitchen payroll can ask about a merchant cash advance, and the first figure to read is how much of each day's card sales the provider would take. The holdback is a fixed share, so a slow day sends less and a busy day sends more, and the kitchen keeps what is left of each batch.
Illustration only, invented figures: the invented advance is $17,400 at a 1.24 factor, so $21,576.00 is to be collected, a cost of $4,176.00 before fees. The invented holdback is 12% of each day's card sales, and the table runs it at three invented levels of daily sales.
| Invented daily card sales | Sent to the provider that day | Left in the batch that day | Business days to collect $21,576.00 |
|---|---|---|---|
| $1,900.00 | $228.00 | $1,672.00 | 95 |
| $2,450.00 | $294.00 | $2,156.00 | 74 |
| $3,100.00 | $372.00 | $2,728.00 | 58 |
In these invented numbers the $4,176.00 cost is the same at every level; only the time changes, from 58 business days at $3,100 of daily sales to 95 at $1,900. What is left of each batch after the holdback is what the kitchen has toward payroll that day.
ZIP 76801, the ZIP holding most of Brownwood, TX, had 20 full-service restaurants with employees in 2023 (ZIP Code Business Patterns, NAICS 722511), each with a payroll calendar of its own.
Cash first, card sales after: how a merchant cash advance works for a Brown County, TX quick-service restaurant
Brown County, TX had 34 limited-service restaurants with employees in 2023, and only 4 of them had fewer than five employees (County Business Patterns, NAICS 722513). A counter-service kitchen that takes cards at the register has the daily sales an advance is built on:
- The provider pays a lump sum today for a larger, fixed slice of card sales the business has yet to make.
- The agreement fixes the amount to be collected and the share of daily card sales, called the holdback.
- Each business day the processor or a bank debit sends that share to the provider.
- Collection stops once the agreed amount is in; there is no interest rate and no set end date.
Because the provider is buying sales that have not happened yet rather than lending money, the advance is not a loan, and it does not come with a monthly installment.
What is a factor rate on a Brownwood, TX merchant cash advance?
The advance times its factor rate equals the full sum the provider will take from card sales. Offers print it as a decimal like 1.2 or 1.35, and it prices the whole advance at once rather than a single year.
Illustration only, invented figures: an invented $19,350 advance at a 1.29 factor means $24,961.50 collected, so the invented cost is $5,611.50.
| Invented collection time | Amount collected | Cost |
|---|---|---|
| 80 business days | $24,961.50 | $5,611.50 |
| 120 business days | $24,961.50 | $5,611.50 |
The cost stays the same whether sales bring the amount in sooner or later. Settling the advance early lowers the cost only if the agreement has an early-settlement discount.
The holdback rate at a Brown County, TX gas station store: a share of each day’s card sales
Holdback is the slice, in percent, that comes off each day’s card sales on its way to the provider. On a strong day the provider gets more; on a thin day it gets less, so the time to finish moves with sales.
| Invented day | Card sales | Sent to the provider |
|---|---|---|
| Monday | $1,840.00 | $184.00 |
| Tuesday | $2,210.00 | $221.00 |
| Wednesday | $1,960.00 | $196.00 |
| Thursday | $2,575.00 | $257.50 |
| Friday | $3,120.00 | $312.00 |
| Five-day total | $11,705.00 | $1,170.50 |
In this invented week the store sent $1,170.50 toward its advance. Some agreements take a fixed daily amount instead and adjust it later through a reconciliation clause, which is worth reading line by line.
Turning an offer’s amounts into a factor rate: a worked case for a Brown County, TX retailer
An offer may show the advance and the total to be collected without naming the factor. Dividing the second by the first gives it. Retail trade had 107 employer establishments with a ZIP 76801 address in 2023 (ZIP Code Business Patterns), and a shop among them can check an offer this way.
Illustration only, invented figures: an invented offer lists an $18,000 advance and $23,940 to be collected. That works out to a 1.33 factor, or $5,940 of cost, which is 33 cents for every dollar advanced in this invented case.
With a 9% holdback on $1,875 of invented average daily card sales, the provider takes $168.75 a day, and collection runs 142 business days at those invented sales. The business loans page sets the advance beside the five other products.
By Deltagrove Loans · Updated
