Business Funding Glossary
The most complete dictionary of business funding terms on the internet. Every term includes a definition, real-world example, and links to related concepts.
Pricing & Costs
Factor Rate
A factor rate is a multiplier used to determine the total cost of a merchant cash advance or short-term business loan. U...
Holdback
In merchant cash advance agreements, the holdback (also called retrieval rate or withholding percentage) is the fixed pe...
Retrieval Rate
The retrieval rate is another term for the holdback percentage in a merchant cash advance. It represents the percentage ...
Advance Rate
The advance rate is the percentage of an asset's value or a business's monthly revenue that a lender is willing to provi...
Origination Fee
An origination fee is an upfront charge assessed by a lender for processing and underwriting a loan or financing agreeme...
Prepayment Penalty
A prepayment penalty is a fee charged by a lender when a borrower pays off a loan before its scheduled maturity date. Pr...
Funding Products
Merchant Cash Advance (MCA)
A merchant cash advance is a financing arrangement where a business receives a lump sum of capital in exchange for a per...
Bridge Loan
A bridge loan is a short-term financing solution designed to 'bridge' the gap between an immediate capital need and a lo...
Hard Money Loan
A hard money loan is an asset-based loan secured primarily by the value of real property rather than the borrower's cred...
Invoice Factoring
Invoice factoring is a financing arrangement where a business sells its outstanding invoices (accounts receivable) to a ...
Purchase Order Financing
Purchase order (PO) financing is a funding solution that provides capital to pay suppliers for goods that have already b...
Revenue-Based Financing (RBF)
Revenue-based financing is a funding model where a business receives capital in exchange for a fixed percentage of ongoi...
Sale Leaseback
A sale leaseback (or sale-leaseback) is a financial transaction where a business sells an asset it owns — typically equi...
SBA Loans
SBA loans are business loans partially guaranteed by the U.S. Small Business Administration, reducing risk for lenders a...
Equipment Financing
Equipment financing refers to loans or leases used to purchase business equipment, machinery, vehicles, or technology. T...
Business Line of Credit
A business line of credit is a flexible financing arrangement that gives a business access to a predetermined amount of ...
Term Loan
A term loan is a traditional business loan where a borrower receives a lump sum of capital and repays it in fixed instal...
Accounts Receivable Financing
Accounts receivable (AR) financing is a broad category of funding that allows businesses to borrow against or sell their...
Real Estate
Risk & Strategy
Financial Metrics
Business Credit
DUNS Number
A DUNS (Data Universal Numbering System) number is a unique nine-digit identifier assigned to businesses by Dun & Bradst...
Paydex Score
The Paydex Score is a business credit score developed by Dun & Bradstreet that ranges from 0 to 100 and measures how pro...
Net 30
Net 30 is a payment term indicating that the full invoice amount is due within 30 calendar days of the invoice date. In ...
Business Credit
Business credit is a credit profile established in a company's name (not the owner's personal name) that reflects the bu...