Glossary · Pricing and math
Split funding
Split funding is an MCA repayment method where the card processor sends a fixed percentage of each card settlement to the funder before the merchant is paid.
Also called split withholding, credit card split, processor split
Split funding was the original MCA model. The merchant's card processor holds back the agreed holdback percentage of each batch and remits it to the funder, so repayment rises and falls with card sales.
Most advances today use fixed ACH remittance instead, because it works for businesses with little card volume. Split deals still appear with restaurants and retailers. They need the card-processor statements in the file.
Track it on every deal
Statements, offers, positions and commissions with the math worked out, in one CRM for lending companies.
Related
- FeatureBank statement analysisEnter each month's deposits, ADB, NSFs and negative days per bank account and get averages, revenue trend, holdback and an affordability check on the deal.Read
- GlossaryHoldbackHoldback is the share of a merchant's revenue that goes to repaying a cash advance, either a fixed split of card sales or the effective share taken by fixed ACH payments.Read
- GlossaryACH remittanceACH remittance is repaying an MCA through fixed daily or weekly debits from the merchant's bank account until the full RTR is delivered.Read
- GlossaryMerchant cash advance (MCA)A merchant cash advance is a funder buying part of a business's future receivables at a discount, repaid by a share of sales or fixed debits until the RTR is delivered.Read
- GlossaryReconciliationReconciliation is a merchant's contractual right to have fixed MCA payments adjusted to match actual receipts when sales fall, a key feature of the true-sale structure.Read