Wire Fee: Meaning in a Merchant Cash Advance
A wire fee is a small charge for sending your funding by bank wire instead of a standard ACH transfer. Funders usually subtract it from the funding amount, and it's the reason your deposit arrives the same day rather than a day or two later.
What does wire fee mean?
There are two common ways to move the money to your account. ACH is cheaper and slower. A wire is faster and costs more to send. Many funders wire by default so you have the cash quickly, and they pass the bank's cost to you as a line item. Your own bank sometimes charges a separate fee to receive a wire, which is set by your bank, not the funder.
Why does wire fee matter to your business?
It's rarely a big number, but it belongs in your math with the other fees. It also helps you understand why the net funding on your offer isn't a round number. If speed doesn't matter to you, ask whether ACH is available instead. On a same-day advance, the wire is usually the whole point.
Why does the deposit look short?
Owners sometimes call worried that the deposit is lower than the offer. The usual answer is that the wire fee and other setup fees were taken before the money left the funder. Your closing statement lists each one, so match the deposit to it before you worry.
How do you receive the wire?
Check with your bank about incoming wire fees and cutoff times. A wire that arrives after the bank's cutoff posts the next business day, so it helps to know your bank's timing before the funding call.
Where will you see it?
In the fee schedule of the contract and on your closing statement, sometimes grouped with other setup fees under one heading.
Which terms are related to wire fee?
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.