Rowanharbor Finance hands Hopkinsville advance requests to funding sources.
Cash now in exchange for a slice of card sales still to come: that is the advance, and it is not a loan. The page shows how card sales set the length, walks an advance from offer to the last remittance, works the factor and the holdback through invented cases, and backs the factor out of an offer sheet.
At a glance
- What it is
A purchase of future card sales, not a loan
- How it is collected
A share of daily card sales until a fixed total
- Cost
Fixed at signing by the factor in the offer
Card sales set the pace: how many business days a Hopkinsville, KY auto repair shop's advance runs
With a true holdback, the provider collects a set percentage of each day's card sales, so the total never changes but the number of days does. Strong card days finish the advance sooner; weaker ones stretch it out.
Illustration only, invented figures: a Hopkinsville, KY auto repair shop takes a $13,600 advance to cover a quarterly tax payment, with a 1.29 factor and an 11% holdback. The invented total to be collected is $17,544.00 however long it takes. The table shows how long it runs at three invented levels of daily card sales.
| Daily card sales | Collected per day | Total collected | Estimated length |
|---|---|---|---|
| $1,200 | $132.00 | $17,544.00 | 133 business days |
| $1,800 | $198.00 | $17,544.00 | 89 business days |
| $2,400 | $264.00 | $17,544.00 | 67 business days |
The days are rounded up, as the calculator on this page does, because the last remittance can be a partial one. Card sales on some days will not match any of these rows, so the real length falls wherever the shop's actual sales put it.
From offer to the last remittance: a merchant cash advance at a Christian County, KY pharmacy front store
- The pharmacy calls or sends the request form; on the call it can describe its front-store card sales and the bill it needs to cover.
- A funding source reviews the request and may ask for recent card processing and bank statements.
- Any offer states the advance, the factor, the total to be collected and either a holdback percentage or a fixed daily debit.
- After signing, remittances come out each business day until the total is collected; nothing more is owed after that.
Two points are worth checking at the offer stage: whether collection follows actual card sales or is a fixed daily amount, and what the contract says about a day with no card sales at all. Both change how the advance feels day to day. A company paid by invoice and check, such as a cleaning contractor, has few card sales to collect from; a cleaning contractor’s payroll case shows a loan and a line instead.
Retail trade had 156 employer establishments at ZIP 42240 addresses in 2023, and a third of them (33.3%) had fewer than five employees, according to ZIP Code Business Patterns.
The factor in a merchant cash advance, worked through for a Hopkinsville, KY liquor store
A factor is a multiplier written into the offer. Multiply the advance by it to get what the provider will collect in all; the difference is the cost. It is not an annual rate, and it does not grow with time: the cost is fixed at signing.
Illustration only, invented figures: a Hopkinsville, KY beer, wine and liquor store takes a $9,800 advance with a 1.34 factor. The total to be collected is $13,132.00, and the cost of the advance is $3,332.00, or 34 cents on every invented dollar received.
County Business Patterns counted 16 beer, wine and liquor stores in Christian County, KY in 2023 (NAICS 445310), and half of them had fewer than five employees.
When card receipts dip: how a Christian County, KY physician office's advance remittance moves, and a fixed installment does not
A merchant cash advance is not a loan, and the difference shows on a weak day. With a true holdback, the remittance follows the card receipts down; a term loan's installment stays the same whatever the office takes in.
Illustration only, invented figures: with a 10% holdback, a physician office that runs $1,500 through its card terminal remits $150.00 that day; on a $900 day it remits $90.00. A loan installment would not move with either day.
Some advances use a fixed daily debit instead of a true holdback, with a reconciliation clause that may adjust the amount if card receipts fall. The contract says which method applies and how to ask for a reconciliation.
Holdback at 8% or 12% of a Hopkinsville, KY bakery's card sales: same total, different length
Each card day, a fixed percentage of receipts goes to the provider before the rest reaches the shop; that percentage is the holdback. A higher holdback finishes the advance sooner but leaves less cash in the drawer each day; a lower one does the opposite. The total does not change.
Illustration only, invented figures: a Hopkinsville, KY bakery takes a $6,200 advance with a 1.26 factor, so $7,812.00 is collected in all. On $640 of invented daily card sales, an 8% holdback takes $51.20 a day for about 153 business days, while a 12% holdback takes $76.80 a day for about 102 business days.
The bakery case holds card sales steady. A counter that also takes cash feeds the holdback only from its card share, which stretches the count of days; the restaurant funding post works an advance with a cash share through invented numbers.
Backing the factor out of an offer sheet: a Christian County, KY auto parts store's supplier-payment advance
Some offer sheets show the advance and the total but not the factor. Working it out takes three steps:
- Divide the total to be collected by the advance amount: that is the factor.
- Take the advance away from the total to see what the money costs in dollars.
- Divide the total by the daily remittance to estimate the business days, rounding up.
Illustration only, invented figures: an auto parts and tire store in Christian County, KY is offered $15,250 to pay a supplier, with $19,825 to be collected at 12% of card sales. The invented factor is 1.30, the cost is $4,575.00, and at $2,100 of daily card sales the store remits $252.00 a day for about 79 business days.
There were 14 automotive parts, accessories and tire stores in Christian County, KY in 2023 (County Business Patterns, NAICS 4413).
By Rowanharbor Finance · Updated
