Term Sheet
An MCA term sheet is the formal pricing offer presented to qualified merchants — specifying advance amount, factor rate, holdback percentage, daily/weekly payment, total payback, and key contract terms — providing the basis for merchant decision and contract execution.
Why This Matters
Term sheets formalize MCA pricing offers and trigger the merchant decision process. Standard term sheet content: gross advance amount, factor rate, total payback amount, daily or weekly payment amount, holdback percentage (if applicable), origination fee, repayment timeline (RTI estimate), early payoff terms, and material contract provisions. Term sheet presentation is a critical sales conversation — strong reps walk through terms in detail, address questions, and guide toward decision. Term sheets typically valid for 1-7 days to maintain pricing certainty against changing underwriting conditions.
Frequently Asked Questions
Frequently Asked Questions
What information appears on an MCA term sheet?
Gross advance amount, factor rate, total payback, daily/weekly payment, origination fee, holdback percentage, repayment timeline estimate, early payoff terms, and material contract provisions. Some term sheets include additional information like APR-equivalent calculations (especially in disclosure-required states).
Can MCA term sheets be negotiated?
Sometimes — sophisticated merchants and brokers negotiate factor rate, origination fee, holdback percentage, and term length. Less-sophisticated merchants typically accept term sheets as offered. Negotiating leverage depends on merchant qualification strength and competing offers from other funders.