An advance based on future sales where repayment is typically taken as a percentage of daily card sales or daily/weekly withdrawals. Cost is often quoted as a factor rate instead of an interest rate.
For example, a restaurant receives $40,000 today and repays it through a percentage of daily card sales until a fixed payback amount is reached.
Why it matters: While highly accessible for businesses with poor credit, the cost of capital is typically much higher than traditional loans and can impact daily cash flow.
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