Purchase Price: Meaning in a Merchant Cash Advance
The purchase price is what the funder pays you for the future sales it buys. It's the headline advance amount. It isn't always what lands in your account: fees and any old balance being paid off can come out first. The difference between the purchase price and the purchased amount is the cost of the advance, before those fees.
Where does it show up?
Near the top of the contract, next to the purchased amount. State disclosures call it the total amount of the financing, and list the disbursement amount separately when fees are taken out.
Is the purchase price what lands in your account?
Not always. Fees taken at funding and any payoff of an older balance come out first, so the deposit is the purchase price minus those amounts. Ask for the net figure in writing.
What does it look like in practice?
Purchase price $50,000. Origination fee $1,500. Old balance paid off $10,000. The disbursement amount, the cash you actually receive, is $38,500. The cost is still charged on the full $50,000.
Which owner question goes with this term?
What fees can come with an MCA? Answers to the questions owners ask about this term, with what to ask the funder.
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.