Wire Transfer: Meaning in a Merchant Cash Advance
A wire transfer is an electronic payment sent directly from one bank to another, usually settled the same business day. Businesses use wires for large or urgent payments because they post fast and are hard to reverse.
What does wire transfer mean?
Unlike ACH, which moves payments in batches, a domestic wire moves one payment at a time through the Federal Reserve's Fedwire system or a private network. The receiving bank usually posts it within hours. Both banks charge fees, and the sender needs the receiving account's routing and account numbers.
Why does wire transfer matter to your business?
Many funders send advance proceeds by wire, and some charge a wire fee that comes out of the funded amount. Wires are also how scammers most often steal money, because a wire is so hard to recall. Never wire money to anyone to "unlock" an approval or cover an upfront fee. A legitimate broker or funder doesn't ask you to send money before you get funded.
Which habits keep wires safe?
- Confirm wiring instructions by calling a phone number you already know, not one in the email.
- Be suspicious of any last-minute change to account details.
- Ask for a written payoff letter before wiring a payoff.
How is a wire different from ACH?
A wire is faster and costs more. An ACH is cheaper and takes a day or two. For a payoff, the funder's letter usually says which one it accepts and by what time.
Where will you see it?
On the funding confirmation, where a wire fee appears as a line item. On your bank statement as an incoming wire with a reference number. In payoff instructions, when you pay an advance off in one payment.
Which terms are related to wire transfer?
The full list is in the glossary. Owners ask about this in What does an MCA payment look like on my bank statement?.
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.