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Common Merchant Cash Advance Terms You Should Know

MCA companies often use different terminology than traditional financial products. To maintain full transparency, we’ve put together this interactive guide that will help you navigate common MCA words and phrases.

  • ACH (Automatic Clearing House) — Also known as direct payments, ACH is a way to transfer money from one bank account to another without using checks, credit card networks, wire transfers, or cash.
  • Business Cash Advance — Just a synonym for Merchant Cash Advance. Read all about MCAs here.
  • Credit Card Split — A payment process where we take a percentage of your credit card sales directly from your payment system rather than from your bank via ACH.
  • COJ (Confession of Judgment) — An admission of liability and failure to abide by contractual terms that allow for the filer to bypass the legal process to satisfy a debt. Elevate has not and will never make use of premature COJs. Read more about this here.
  • DecisionLogic — An advanced bank verification system enabling lenders to instantly verify a potential borrower’s banking information online and in real-time.
  • Direct Funder — The company providing the working capital you receive when taking out a Merchant Cash Advance. When you’re dealing with a Direct Funder, you are speaking to the company making the funding offer, not the middleman.
  • Factor Rate — An alternative method of presenting fees and cost of funds. For example: If the factor rate is 1.25, then for every dollar we advance, the business owner would pay back $1.25.
  • Flex Funds — With Flex Funds, we offer the ability to take additional funds up to 30% of your funding amount after three weeks of consecutive payments.
    Please note: Flex Funds are limited to one time per advance.
  • FRSA (Future Receivables Sales Agreement) — An agreement states that your sales performance will be re-evaluated on a regular basis to ensure your daily payment amount is in line with the agreed-upon payment percentage. If your sales have dropped, we will adjust your payment amount accordingly.
  • Lockbox — Essentially an escrow service we use when a merchant wants to move forward with a credit card split, but they use a processor that we do not support. The Lockbox will collect the agreed daily remit percentage from their credit card sales, while the rest transfers to their bank account as normal.
  • Personal Guarantee — A legal promise to repay credit issued to a business.
  • Purchase Price & Amount Sold — “Purchase Price” refers to the amount of money we advance you upfront. “Amount Sold” is how much you will remit and pay back.
  • Renewal — When you take out additional funds with us, you are “renewing” your MCA. There is often a cost savings associated with renewing instead of seeking funding elsewhere.
  • Site Survey — An underwriting requirement for larger deals where we review photos and check off a standard list of questions to ensure the business’s location is legitimate.
  • Stacking — The process of stacking multiples advances [or loans] on top of each other within the same period of time, which overleverages the business owner. We do not allow or condone stacking. More on this here.
  • UCC (Uniform Commercial Code) — A lien filed by a lender when they make a collateralized loan, essentially declaring an interest in property for a debt. Elevate does not file UCCs unless the file enters into collections status after exhausting all possible avenues to rectify the situation.


Revenue-Based Finance is formerly and alternatively known as Merchant Cash Advance, or MCA.