The factor rate a funder offers a broker, before the broker adds their own margin.
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.
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.
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