Addendum: Meaning in a Merchant Cash Advance
An addendum is a document added to a contract that changes, clarifies or adds terms. In merchant cash advances, addenda often cover early payoff discounts, payment modifications, add-on funding or state required disclosures.
What does addendum mean?
Instead of rewriting the whole merchant agreement, funders attach an addendum. It sets out an early payoff schedule, lower your payment for a period or add new money to your advance. Once signed, it becomes part of the contract.
Why does addendum matter to your business?
An addendum can change your deal in important ways. A payment modification often extends the term or adds a fee. An early payoff addendum is sometimes the only place your discount appears. Read every addendum as carefully as the main contract, and keep signed copies together.
Does an unsigned addendum count?
An unsigned addendum usually isn't binding. If a salesperson promises a term, ask for it in a signed addendum.
How do you keep track of addenda?
Number and date each addendum in your records so you always know which terms are current.
What are state-required addenda?
In states with commercial financing disclosure laws, the required disclosure is sometimes attached as an addendum or a separate document you sign or acknowledge. It shows the total cost, the estimated APR and other figures. Read it next to the contract and check that the numbers match what you were told.
Why keep every addendum with the contract?
Store every addendum with the main contract.
Where will you see it?
At the end of the e-signature envelope, or as a separate document sent later during the advance.
Which terms are related to addendum?
The full list is in the glossary. Owners ask about this in What's the difference between an MCA approval and an offer?.
A term on your offer you don't recognize?
Send us the line and we'll tell you what it means. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.