The difference between the buy rate and what the merchant is quoted is the broker’s upsell, and it sits on top of any points paid by the funder. A buy rate of 1.28 sold at 1.38 means the merchant pays ten points of factor more than the funder required.
Related terms
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.
Points
The broker or ISO commission on a funded advance, expressed as a percentage of the funded amount.
Commercial financing disclosure law
State legislation requiring standardised cost disclosures to a business before it signs a financing agreement.