Reference
MCA glossary
The terms brokers, ISOs and funders actually use, defined without the marketing.
A
- ACH remittanceRepayment collected by scheduled debit from the merchant’s bank account rather than as a split of card receipts.
- Aged leadsPreviously generated lead records resold weeks, months or years after the merchant originally applied.
- APRThe annualised cost of financing, accounting for the repayment schedule as well as the amount charged.
- Average daily balanceThe mean end-of-day balance across the statement period, and the primary measure of remittance capacity.
B
- Blanket lienA security interest covering substantially all of a business’s assets rather than specific identified collateral.
- Broker agreementThe contract between a broker or ISO and a funder governing submissions, commission and conduct.
- Broker registrationA state requirement that a firm brokering commercial financing register with a regulator before doing so.
- Buy rateThe factor rate a funder offers a broker, before the broker adds their own margin.
C
- CAN-SPAMThe federal law governing commercial email, requiring accurate headers, a clear opt-out and honouring it promptly.
- CFPBThe federal agency with rulemaking and enforcement authority over consumer financial products, and over small business lending data under Section 1071.
- ChargebackA card transaction reversed at the cardholder’s request, returning funds and usually incurring a fee.
- ClawbackA funder recovering commission already paid, typically when a merchant defaults early in the term.
- Close rateThe share of qualified merchants who accept an offer and fund.
- CollateralAssets a secured party can claim if the obligation is not met.
- Commercial financing disclosure lawState legislation requiring standardised cost disclosures to a business before it signs a financing agreement.
- Confession of judgmentA contractual clause in which a merchant agrees in advance to entry of judgment against them on default, without a hearing.
- ConsolidationA single new advance used to pay off two or more existing positions, replacing several remittances with one.
- Contact rateThe share of purchased leads that reach an actual conversation with the merchant.
- Cost per funded dealTotal acquisition spend divided by the number of deals that actually funded from it.
- Cost per leadThe price paid to acquire a single lead record, before any consideration of whether it converts.
- Cure periodA contractual window in which a merchant can remedy a breach before default consequences apply.
- Customer concentrationThe degree to which a business’s revenue depends on a small number of customers.
D
- Data appendAdding contact details to a record from a third-party database rather than collecting them from the person directly.
- DBAA name a business trades under that differs from its registered legal entity name.
- DebtorThe business whose assets a UCC filing attaches to — the party that granted the security interest, not necessarily a business behind on a payment.
- DeclineA funder’s refusal to make an offer on a submitted file.
- DefaultA merchant’s failure to meet the terms of the advance agreement, most commonly repeated missed or returned remittances.
- Default rateThe share of advances that fail to be repaid in full under their original terms.
- Deposit countThe number of separate deposits into a merchant’s account in a statement period, as distinct from the total deposited.
- Do Not Call RegistryThe federal registry of numbers that may not be contacted for telemarketing purposes.
- Double dialCalling a lead twice in quick succession, on the basis that a second ring shortly after a missed first is answered noticeably more often.
E
F
- Factor rateA multiplier applied once to an advance amount to give the total repayment — a $50,000 advance at 1.40 means $70,000 repaid.
- FactoringSelling outstanding invoices to a third party at a discount for immediate cash.
- Filing agentA service company that files a UCC-1 on a funder’s behalf and is named as the secured party itself, so the funder’s own name never appears on the record.
- First positionThe earliest outstanding advance against a merchant, with priority over any that follow.
- FunderThe party that deploys the capital in a merchant cash advance and carries the risk of repayment.
L
M
N
P
- Paper gradeAn informal classification of merchant quality, from A paper — strong revenue, no positions, long trading history — down to C or D.
- Personal guaranteeA commitment by the business owner to be personally liable if the business does not meet its obligations.
- PipelineThe set of merchants a broker is working, grouped by stage from first contact through to funded.
- PointsThe broker or ISO commission on a funded advance, expressed as a percentage of the funded amount.
- PositionAn individual outstanding advance against a merchant, counted in order — first position, second position, and so on.
- Prior express written consentThe standard of permission required for certain marketing calls and texts to wireless numbers under the TCPA.
R
- Real-time deliverySending a lead record to the buyer at the moment of submission rather than in a scheduled batch.
- RecharacterisationA court or regulator determining that a transaction structured as an advance was, in substance, a loan.
- ReconciliationThe contractual process by which a merchant can have their remittance adjusted when actual receipts fall short of what was projected.
- RenewalA new advance to a merchant who already has repayment history with the funder, usually once a meaningful share of the existing advance is repaid.
- RetainageA portion of a contract sum withheld until work is completed and accepted, common in construction.
- Revenue-based financingFunding repaid as a percentage of ongoing revenue rather than on a fixed schedule.
- Reverse consolidationA funding arrangement in which a new funder makes periodic payments toward a merchant’s existing positions rather than paying them off outright.
- Round robinA distribution method in which each incoming lead is assigned to one client in rotation.
S
- Secretary of stateThe state office that holds a state’s business entity and UCC filing records, and the office a UCC-1 is filed with.
- Section 1071The Dodd-Frank provision requiring lenders to collect and report demographic and pricing data on small business credit applications.
- Secured partyThe party named on a UCC-1 as holding the security interest in a business’s assets — on an advance filing, usually the funder.
- Settlement scheduleThe timetable on which a payment processor or marketplace pays out a merchant’s takings.
- Shared leadsLead records sold simultaneously to multiple buyers, typically three to five.
- Speed to leadThe elapsed time between a lead being generated and the first outbound contact attempt.
- StackingA merchant taking an additional advance while an earlier one is still outstanding, so multiple remittances draw on the same receipts.
- SubmissionA completed merchant file sent to a funder for underwriting.
- Suppression listA list of contacts that must be excluded from outreach — opt-outs, complaints, known litigators, existing customers.
- SyndicationMultiple parties each funding a portion of the same advance and sharing the returns and the risk proportionally.
T
- TCPAFederal law restricting calls and texts to wireless numbers, with statutory damages of $500 to $1,500 per violation.
- Time in businessHow long a merchant’s entity has been trading, measured from formation or from first revenue depending on the funder.
- Total paybackThe full amount a merchant repays, calculated as the advance multiplied by the factor rate.
U
- UCC leadsContact lists compiled from UCC filings, identifying businesses that have previously taken secured funding.
- UCC searchA query run against a state filing office’s UCC index to find the financing statements naming a particular business as debtor.
- UCC-1 financing statementA public notice filed with the secretary of state recording a secured party’s claim against a business’s assets.
- UCC-3 terminationA filing that releases or amends an existing UCC-1, most often recording that a secured party’s claim has ended.
- UnderwritingA funder’s assessment of whether a merchant’s receipts can absorb a daily remittance, and on what terms.
- UsuryA legal cap on the interest rate that may be charged on a loan.
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