repayment
Holdback
A holdback is the fixed percentage of daily credit card or bank deposits automatically withheld to repay a business cash advance.
Definition
What it means.
In a business cash advance, the lender purchases a portion of future revenue. The holdback percentage, usually between 8% and 20%, is applied to every daily or weekly deposit until the agreed total is repaid.
Because the dollar amount flexes with revenue, a slow week means smaller repayments and a faster week means larger ones. This is what distinguishes a true BCA from a fixed-daily ACH loan: the holdback is revenue-sensitive, not calendar-sensitive.
Example
15% holdback on $3,000 of daily card sales = $450 withheld automatically that day.
Now what?
Get an offer that accounts for holdback.
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