Plain-English definitions of the terms you'll encounter. Bookmark this page.
ACH remittance
An automated electronic debit from your business bank account, scheduled daily or weekly. The standard repayment method for revenue-based advances.
Advance
The capital LendPoint sends to your business at the start of an agreement. Distinct from a "loan" because it's not interest-bearing — it's a purchase of future revenue.
Approval rate
The percentage of submitted applications that result in a funded deal. LendPoint approves a minority of files. Disciplined origination is a feature, not a bug.
Balance
What's still owed on an advance. Calculated as the total payback minus what's already remitted.
Bank statements
The primary document underwriters review. Three to six months of business bank statements show revenue trends, deposit patterns, NSF history, existing advance remittances, and operational health.
Broker / ISO (Independent Sales Organization)
A third-party that submits merchant applications to lenders in exchange for commission. LendPoint works with ISOs but is itself a direct lender, not a broker.
Buy rate
The factor rate offered by a lender to a broker, before the broker's markup. LendPoint quotes its real rate to merchants directly.
Co-applicant
A second business owner or guarantor on the application. Strengthens the file when ownership is split or when the primary owner has a thin profile.
Confession of Judgment (COJ)
A legal document, signed at the start of an agreement, that allows the lender to obtain a court judgment without a full trial if the merchant defaults. Banned in many states. Where allowed, used as a backstop.
Daily / weekly ACH
The fixed dollar amount remitted from your operating account on either a daily (each business day) or weekly basis, depending on how the agreement is structured. LendPoint typically structures advances on a weekly cadence. The remittance amount doesn't fluctuate with revenue — only the time-to-payback fluctuates.
Default
Failure to honor the agreement: missed remittances, switched bank accounts, undisclosed new advances, etc. Usually fixable if the merchant communicates early.
Direct lender
A company that uses its own capital to fund advances. The opposite of a broker, who shops applications to other lenders. LendPoint is a direct lender.
Factor rate
The multiplier applied to the advance amount to determine total payback. A 1.30 factor on a $100K advance means $130K total payback. Not the same as APR.
Funding amount
The capital sent to the merchant's account at closing. Usually slightly less than the headline advance after origination fees.
Holdback
On a split-funding agreement, the percentage of daily card sales that gets routed to the lender. Common in deals where ACH isn't a fit.
Modification
A change to the original agreement. Examples: a temporary remittance reduction, a payment pause for a few days, a restructure of the schedule. LendPoint considers modifications when merchants communicate proactively.
Origination fee
A one-time fee deducted from the funded amount at closing. Disclosed on the term sheet.
Personal guarantee
A signed commitment from the business owner to honor the agreement personally if the business cannot. Standard in this industry.
Renewal
A new advance issued to a merchant who has paid down or paid off a prior advance. Renewal terms are usually better.
Restricted industries
Industries LendPoint does not fund: cannabis, firearms, adult, MLM, debt-relief services, payday lending, auto-title lending.
Restructure
A material change to the remittance schedule when a merchant is in distress. Typically extends the term and reduces the daily payment. Done in good faith when the underlying business is salvageable.
Servicing
The ongoing operations of an active advance: collecting remittances, handling questions, processing modifications, managing renewals. LendPoint services 100% of its book in-house.
Soft pull / hard pull
Soft credit pull: doesn't affect the credit score, used during initial review. Hard credit pull: shows on the report, may slightly affect the score, sometimes used at closing.
Stacking
Taking a new advance while one or more existing advances are active. Common path to merchant distress. LendPoint generally avoids stacking situations.
Syndication
A funding model where multiple capital sources participate in a single advance. LendPoint syndicates selected deals with capital partners.
Term
The estimated time to pay back an advance. Variable, since payback depends on revenue.
Term sheet
The document outlining the proposed advance: amount, factor, total payback, daily remittance, term estimate, fees, and any conditions.
Total payback
Advance amount × factor rate. The total dollars the merchant will remit over the life of the agreement. Fixed at closing.
Underwriting
The process of reviewing a merchant's file and deciding whether to fund, on what terms, and for how much.
UCC-1 filing
A public lien filed against the merchant's business assets. Standard in revenue-based financing. Releases on payoff.
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