Lewiston, Idaho Business Cash Advance: What a Share of Daily Card Sales Costs

A merchant cash advance takes a share of what the business brings in through its card reader instead of a fixed monthly payment: the provider buys part of future card sales and collects a share of each day of card receipts until the agreed total is reached.

For a coffee and snack bar, where sales run through a card reader, collection follows each day's card settlements, so a day with more card sales sends more and a day with fewer sends less. The advance is arranged through this site, and it is not a loan.

This trade is a real group in the county: County Business Patterns recorded 17 snack and nonalcoholic beverage bars (NAICS 722515) among Nez Perce County, ID employers for 2023, with 201 paid employees in March. Our card-sales advance post works two advance offers through with invented totals.

In legal form, a merchant cash advance is the sale of a slice of future receivables to a provider; it is not a loan. The restaurant receives a lump sum and agrees to deliver a fixed amount from its card sales. There is no interest rate and no maturity date; the agreement ends when the fixed amount has been collected.

Illustration only, invented figures: a dining room accepts $20,000 priced at a 1.35 factor, which fixes the amount the provider collects at $27,000. On $2,600 of daily card sales, a 10% holdback sends $260.00 to the provider per business day, so the total is reached in roughly 104 business days. Let sales dip to $2,000 a day and only $200.00 leaves each day, which drags collection out to roughly 135 business days. The $27,000 total does not change either way.

Payroll still comes due every pay period while that share is being collected, so the advance has to fit beside it.

The holdback rate is the share of each day of card sales the provider collects until the agreed amount is delivered. It can be taken from card settlements before they reach the business account, or as a bank debit worked out from the sales.

Over these five days the restaurant took in $6,210 on cards and $683.10 went to the provider. Friday, the strongest day in the table, also sends the most. Some agreements use a fixed daily debit instead of a true percentage, with a way to ask for an adjustment when sales fall; read which kind the offer is.

The factor rate is the multiplier on the advance. On a Lewiston advance, the factor sets the total once: $1 received at a 1.3 factor means $1.30 collected from card sales, and the 30 cents is the price. A factor of 1.32 means 32 cents of cost on every dollar received, however long collection takes.

Illustration only, invented figures: say a Lewiston, ID brake and alignment shop signs for $15,000 with a 1.32 factor. The total collected is $19,800, and the cost is $4,800. At $1,900 of daily card sales and a 12% holdback, $228.00 a day goes to the provider, and the $19,800 is reached in about 87 business days.

Because the cost is fixed, collecting sooner does not lower it unless the agreement offers a discount for early completion. To test its own figures, the shop can use the calculator on this page, which needs four of them (advance, factor, holdback share, average daily card sales) and answers with three: total remitted, cost of the advance and estimated time to remit.

A salon that restocks color, shampoo for resale and styling products has two common ways to carry a larger order: an advance collected from card sales, or a draw on a credit line that is paid down over a few months.

Illustration only, invented figures: the salon product order comes to $8,000. Taken as an advance priced at 1.24, the order sends $9,920 of card sales to the provider, $1,920 more than the salon received. A credit line draw of the same $8,000 at an annual rate of 13.5%, paid down $2,000 a month over four months, comes to about $225.00 in interest. In this example the line costs far less, but it needs a limit already in place, and some lines charge fees on top.

Beauty salons are a small trade in the county: 12 employer establishments in 2023, and 9 of them employed under five people (County Business Patterns, NAICS 812112).

For a store that takes most of its sales by card, the process runs in this order:

1. Call (208) 361-6012 or send the request form; Keelmead Lending passes it to funding providers.
2. A provider reviews recent card-processing and bank statements, and may check credit.
3. If a provider makes an offer, it lists the advance amount, its factor, the daily share and the full sum to be collected.
4. After signing, the advance is paid into the business account, and the daily share is collected until the total is reached.

Before signing, compare the total collected with what a fixed-payment option would cost; the short-term working capital page shows how a loan is priced instead. The business loans overview lists the other funding types, and the post on loan offer costs reads two loan offers line by line.