Points: Meaning in a Merchant Cash Advance
Points are the commission a broker earns on a merchant cash advance, expressed as a share of the amount funded. They're added between the funder's buy rate and the sell rate you're offered, and the funder pays them out when the deal funds.
What does points mean?
On most merchant cash advance deals, the broker doesn't send you a bill. Instead, the funder builds the broker's pay into the price and pays it when your money is wired. Industry people talk about that pay in points, where each point is a slice of the funded amount. More points means a higher sell rate for you and a bigger check for the broker.
Why does points matter to your business?
Points are where brokers differ. Two brokers can send your file to the same funder and come back with different offers purely because they asked for different points. You don't need to know the exact number to protect yourself. Ask how the broker is paid and whether it's disclosed. At Afterfirst, you never pay us, the funder pays our commission on funding, and it's in your paperwork. If a broker also wants an upfront fee from you, that's a separate charge on top of points, and a reason to slow down.
How does Afterfirst show broker pay?
Your offer paperwork discloses our commission, and it's paid by the funder, never by you. We'd rather you see how the deal is built than wonder about it. If a number in the paperwork doesn't make sense, call and we'll walk you through every line of it.
Where will you see it?
Rarely on your own paperwork by that name. Points show up in how brokers and funders talk about deals, and their effect shows up in your factor rate.
Which terms are related to points?
The full list is in the glossary. Owners ask about this in Is an MCA factor rate monthly or for the whole advance?.
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.