Glossary · Pricing and math
Buy rate
The buy rate is the lowest factor a funder will accept on a deal from an ISO. The ISO can sell above it, and the gap becomes upsell commission.
Also called buy factor, funder buy rate
When a funder approves a deal, it quotes the ISO a buy rate (say 1.28) and often a maximum sell rate. The ISO decides what to present to the merchant. Whatever the merchant signs above the buy rate is the sell rate markup, paid to the ISO as upsell points on top of any base commission.
Keep the buy rate on the offer record even though the merchant never sees it. It is what lets you reconcile the commission the funder pays against what you expected.
Formula
upsell points = (sell rate − buy rate) × 100 ISO markup $ = advance × (sell rate − buy rate)
Example
Buy 1.28, sell 1.35 on $50,000: 7 upsell points, a $3,500 markup.
Track it on every deal
Statements, offers, positions and commissions with the math worked out, in one CRM for lending companies.
Related
- FeatureOffer calculator and comparisonEnter advance, factor, buy rate, fees and frequency and get payback, net funding, payment, term, holdback and your commission. Compare every lender's offer side by side.Read
- FeatureCommissions and reconciliationTrack expected versus received commissions per funded deal, split them with reps and partners, handle clawbacks, and reconcile lender commission statements line by line.Read
- Free toolISO commission calculatorCalculate an ISO's commission on a merchant cash advance: base points, upsell from the buy and sell rate, commission basis, rep and partner splits and clawback exposure.Read
- GlossarySell rateThe sell rate is the factor rate the merchant actually signs, set by the ISO at or above the funder's buy rate. It decides the payback and the ISO's upsell.Read
- GlossaryPointsPoints are ISO commission expressed as a percent of the funded amount: base points paid by the funder plus upsell points from selling above the buy rate.Read
- GlossaryFactor rateThe multiplier that sets what a merchant repays on a cash advance: advance amount times factor rate equals the total payback, usually 1.10 to 1.55.Read
- GlossaryCommission splitA commission split divides the commission a funder pays on a deal between the house, the closer and any sub-ISO or referral partner, by agreed percentages.Read