It fits businesses with steady card volume, and Frostbrook Funding sends the request on to advance providers for their own review.
An advance is priced with a factor rate, not an interest rate, and it is collected from card sales rather than paid in installments. The calculator on this page works through total, cost and time to remit.
At a glance
- Limited-service restaurants, Reno County, KS
45 employer establishments (CBP 2023)
- Retail trade, Reno County, KS
219 employer establishments (CBP 2023)
- Insurance agencies and brokerages with fewer than five employees, Reno County, KS
30 of 39 establishments (CBP 2023)
How revenue-based financing differs from an MCA for insurance agencies in Hutchinson, KS
Revenue-based financing and a merchant cash advance both tie what the business pays to what it takes in, but they read different money. An MCA provider collects a percentage of card sales. A revenue-based provider collects a percentage of total deposits, which includes checks, ACH transfers and card payments.
That difference decides which product an insurance agency can even use. An agency's income is mostly commissions paid by carriers, which arrive by transfer rather than by card. An agency that takes card payments only for its own service charges has little card volume for an MCA to collect from, and a revenue-based arrangement, or a line of credit, reads its real income better.
What a Reno County, KS chiropractic or therapy office signs with a merchant cash advance
A merchant cash advance is not a loan: what the practice signs is a sale of future receivables. The provider buys a portion of the practice's future card sales at a discount, and there is no interest rate, no fixed monthly payment and no set term. If card sales slow, the amount collected each day falls with them.
A chiropractic or therapy office paid largely through insurance claims has a different problem: claim payments are not card sales, so the card share an MCA can collect from may be small. Offices with cash-pay visits, memberships or retail products carry more card volume. In Reno County, KS, 31 of the 42 offices of other health practitioners had fewer than five employees in 2023 (County Business Patterns), and for an office that small the card share decides the size of any advance.
The advance agreement, not this page, governs collection, defaults and early payoff, so it is worth reading in full. A cafe or steakhouse that settles card sales every day can price an advance against a working capital term, as the steakhouse and cafe funding article does with invented figures.
What a holdback rate means for Hutchinson, KS insurance agencies with card sales
A holdback rate tells the provider how many cents of each card-sale dollar to keep, every business day, until the agreed total is in. With a 12% holdback, every $100 of card sales sends $12 to the provider and leaves $88 with the business.
Invented numbers show how it moves with sales. On a day with $1,100 in card sales, a 12% holdback is $132; on a $600 day it is $72. The collection slows down when sales do, which is the main difference from a fixed monthly installment.
Insurance agencies with card sales are the exception rather than the rule. Of the 39 insurance agencies and brokerages in Reno County, KS, 30 had fewer than five employees in 2023 (County Business Patterns), and an office that size can check its card statements before asking about an advance at all.
How to calculate a factor rate for a Hutchinson, KS landscaping company's cash advance
To get the total a provider collects, multiply the advance by its factor rate. The total the provider collects equals the advance times the factor rate, and the cost of the advance is that total minus the advance.
- Advance amount: $20,000 (invented)
- Factor rate from the offer: 1.32 (invented)
- Total to be collected: $20,000 x 1.32 = $26,400
- Cost of the advance: $26,400 - $20,000 = $6,400
If the landscaping company averages $1,100 a day in card sales and the holdback is 12%, the provider collects $132 a business day, and the $26,400 takes about 200 business days to remit. A factor rate is not an annual rate; because the total is fixed, the shorter the time to remit, the higher the cost works out to on a yearly basis.
The calculator on this page does this arithmetic from the advance, factor rate, holdback and average daily card sales you enter.
Merchant cash advance vs line of credit for Hutchinson, KS insurance agencies
A line of credit charges interest on what is drawn and can be drawn again; an MCA is a one-time purchase of future card sales with a fixed total. For an insurance agency, the comparison tends to favor the line, because commissions are not card sales and a line can be paid down whenever a commission check arrives.
- A line of credit is a loan; an MCA is not a loan
- A line's cost depends on balance and time; an MCA's cost is fixed at the start
- A line is paid down on a schedule or at will; an MCA is collected from card sales
- A line can be reviewed at renewal; an MCA ends once the total is collected
How a merchant cash advance works for Hutchinson, KS chiropractic and therapy offices
- The practice sends the request by phone at (620) 261-8939 or online, with time in business and a revenue range.
- A provider can review recent card processing and bank statements to size the advance.
- The offer lays out the total to be collected, along with the advance, the factor rate and the holdback.
- Once signed, the provider sends the funds and starts collecting its share of daily card sales.
Collection ends when the agreed total is reached. Taking a second advance before the first is collected stacks two holdbacks on the same card sales, which can squeeze daily cash for a small office. An office that still wants to ask about an advance can send a request with its revenue range.
By Frostbrook Funding ยท Updated
