Funding Partner
A funding partner is an entity that provides capital directly or participates in funding transactions through syndication or broker relationships.
Funding Position
Funding position refers to the priority order in which funding providers receive remittances when multiple funding agreements exist. Position risk is frequently discussed within fintech and alternative lending resources.
Future Receivables Advance
A future receivables advance is a transaction in which a business sells a portion of its future receivables to a funding provider in exchange for immediate capital. This structure is not a loan and does not involve interest, fixed payments, or a maturity date. It is a core funding structure used by direct lender.
Independent Sales Organization (ISO)
An Independent Sales Organization (ISO) is a third-party entity that originates funding opportunities and submits them to funding providers for approval.
Merchant Cash Advance (MCA — Educational Term)
A merchant cash advance (MCA) is an industry term commonly used to describe receivables-based funding. While widely searched, MCA transactions are legally structured as purchases of receivables rather than loans and are typically explained within broader fintech education resources such as fintech and alternative lending content.
Purchased Amount
The purchased amount is the total value of future receivables sold by the business to the funding provider. It is calculated by applying the factor rate to the funded amount and represents the maximum contractual obligation.
Referral Partner
A referral partner introduces prospective businesses to funding providers without participating in underwriting or pricing.
Remittance
A remittance is the portion of business revenue delivered to the funding provider to satisfy the purchased receivables. Remittances fluctuate with revenue and are not fixed loan payments.
Remittance Percentage (Holdback)
The remittance percentage, sometimes called a holdback, is the agreed percentage of revenue applied toward the purchased amount. Holdback levels vary based on revenue consistency and underwriting risk.
Revenue-Based Funding
Revenue-based funding is a form of alternative funding in which remittance occurs as a percentage of a business’s ongoing revenue. Remittance amounts rise and fall in direct proportion to business performance.
