Order matters because it reflects priority and risk. A first-position funder is repaid from receipts that nothing else is claiming; a fourth-position funder is behind three others. Price rises sharply with position number, and many funders simply stop at second or third.
Related terms
Stacking
A merchant taking an additional advance while an earlier one is still outstanding, so multiple remittances draw on the same receipts.
UCC-1 financing statement
A public notice filed with the secretary of state recording a secured party’s claim against a business’s assets.
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.
UCC-3 termination
A filing that releases or amends an existing UCC-1, most often recording that a secured party’s claim has ended.
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.