The terms brokers, ISOs and funders actually use, defined without the marketing. Every entry says what the term means and why it matters when a file is in front of you.
78 terms, updated as the market changes.
ACH remittance
Repayment collected by scheduled debit from the merchant’s bank account rather than as a split of card receipts.
Aged leads
Previously generated lead records resold weeks, months or years after the merchant originally applied.
APR
The annualised cost of financing, accounting for the repayment schedule as well as the amount charged.
Average daily balance
The mean end-of-day balance across the statement period, and the primary measure of remittance capacity.
Blanket lien
A security interest covering substantially all of a business’s assets rather than specific identified collateral.
Broker agreement
The contract between a broker or ISO and a funder governing submissions, commission and conduct.
Broker registration
A state requirement that a firm brokering commercial financing register with a regulator before doing so.
Buy rate
The factor rate a funder offers a broker, before the broker adds their own margin.
CAN-SPAM
The federal law governing commercial email, requiring accurate headers, a clear opt-out and honouring it promptly.
CFPB
The federal agency with rulemaking and enforcement authority over consumer financial products, and over small business lending data collection under Section 1071.
Chargeback
A card transaction reversed at the cardholder’s request, returning funds and usually incurring a fee.
Clawback
A funder recovering commission already paid, typically when a merchant defaults early in the term.
Close rate
The share of qualified merchants who accept an offer and fund.
Collateral
Assets a secured party can claim if the obligation is not met.
Commercial financing disclosure law
State legislation requiring standardised cost disclosures to a business before it signs a financing agreement.
Confession of judgment
A contractual clause in which a merchant agrees in advance to entry of judgment against them on default, without a hearing.
Consolidation
A single new advance used to pay off two or more existing positions, replacing several remittances with one.
Contact rate
The share of purchased leads that reach an actual conversation with the merchant.
Cost per funded deal
Total acquisition spend divided by the number of deals that actually funded from it.
Cost per lead
The price paid to acquire a single lead record, before any consideration of whether it converts.
Cure period
A contractual window in which a merchant can remedy a breach before default consequences apply.
Customer concentration
The degree to which a business’s revenue depends on a small number of customers.
Data append
Adding contact details to a record from a third-party database rather than collecting them from the person directly.
DBA
A name a business trades under that differs from its registered legal entity name.
Decline
A funder’s refusal to make an offer on a submitted file.
Default
A merchant’s failure to meet the terms of the advance agreement, most commonly repeated missed or returned remittances.
Default rate
The share of advances that fail to be repaid in full under their original terms.
Deposit count
The number of separate deposits into a merchant’s account in a statement period, as distinct from the total deposited.
Do Not Call Registry
The federal registry of numbers that may not be contacted for telemarketing purposes.
Double dial
Calling a lead twice in quick succession, on the basis that a second ring shortly after a missed first is answered noticeably more often.
Factor rate
A multiplier applied once to an advance amount to give the total repayment — a $50,000 advance at 1.40 means $70,000 repaid.
Factoring
Selling outstanding invoices to a third party at a discount for immediate cash.
First position
The earliest outstanding advance against a merchant, with priority over any that follow.
Funder
The party that deploys the capital in a merchant cash advance and carries the risk of repayment.
Paper grade
An informal classification of merchant quality, from A paper — strong revenue, no positions, long trading history — down to C or D.
Personal guarantee
A commitment by the business owner to be personally liable if the business does not meet its obligations.
Pipeline
The set of merchants a broker is working, grouped by stage from first contact through to funded.
Points
The broker or ISO commission on a funded advance, expressed as a percentage of the funded amount.
Position
An individual outstanding advance against a merchant, counted in order — first position, second position, and so on.
Prior express written consent
The standard of permission required for certain marketing calls and texts to wireless numbers under the TCPA.
Real-time delivery
Sending a lead record to the buyer at the moment of submission rather than in a scheduled batch.
Recharacterisation
A court or regulator determining that a transaction structured as an advance was, in substance, a loan.
Reconciliation
The contractual process by which a merchant can have their remittance adjusted when actual receipts fall short of what was projected.
Renewal
A new advance to a merchant who already has repayment history with the funder, usually once a meaningful share of the existing advance is repaid.
Retainage
A portion of a contract sum withheld until work is completed and accepted, common in construction.
Revenue-based financing
Funding repaid as a percentage of ongoing revenue rather than on a fixed schedule.
Reverse consolidation
A funding arrangement in which a new funder makes periodic payments toward a merchant’s existing positions rather than paying them off outright.
Round robin
A distribution method in which each incoming lead is assigned to one client in rotation.
Section 1071
The Dodd-Frank provision requiring lenders to collect and report demographic and pricing data on small business credit applications.
Settlement schedule
The timetable on which a payment processor or marketplace pays out a merchant’s takings.
Shared leads
Lead records sold simultaneously to multiple buyers, typically three to five.
Speed to lead
The elapsed time between a lead being generated and the first outbound contact attempt.
Stacking
A merchant taking an additional advance while an earlier one is still outstanding, so multiple remittances draw on the same receipts.
Submission
A completed merchant file sent to a funder for underwriting.
Suppression list
A list of contacts that must be excluded from outreach — opt-outs, complaints, known litigators, existing customers.
Syndication
Multiple parties each funding a portion of the same advance and sharing the returns and the risk proportionally.
TCPA
Federal law restricting calls and texts to wireless numbers, with statutory damages of $500 to $1,500 per violation.
Time in business
How long a merchant’s entity has been trading, measured from formation or from first revenue depending on the funder.
Total payback
The full amount a merchant repays, calculated as the advance multiplied by the factor rate.
UCC leads
Contact lists compiled from UCC filings, identifying businesses that have previously taken secured funding.
UCC-1 financing statement
A public notice filed with the secretary of state recording a secured party’s claim against a business’s assets.
UCC-3 termination
A filing that releases or amends an existing UCC-1, most often recording that a secured party’s claim has ended.
Underwriting
A funder’s assessment of whether a merchant’s receipts can absorb a daily remittance, and on what terms.
Usury
A legal cap on the interest rate that may be charged on a loan.
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