Most merchant cash advances are written to repay in roughly 3 to 12 months, with daily or weekly remittances. Actual payoff usually runs longer than the scheduled term because of missed payments, reduced remittances and renegotiated plans, so investors should measure actual days from funding to full repayment rather than the stated term.
Why deals run long
- Merchants request reduced daily payments during slow periods.
- Bounced or paused remittances add days without reducing the amount owed.
- Settlements stretch the balance over a longer plan.
- Holidays and weekends break daily collection schedules.
What to measure instead
- Average and median days from funding to payoff, per wallet and per month.
- Percentage paid against days elapsed on every open deal.
- Deals past their expected payoff date that are still under 100% paid.
- Collection velocity: cash collected per day versus the pace needed to finish on time.
Why speed drives your return
A 1.30 factor collected in four months earns far more annualized than the same 1.30 collected in ten, because the capital can be redeployed sooner. Two investors with identical factor rates can end the year far apart purely on turnover speed.
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