Glossary

Buy rate

The funder’s factor rate before a broker’s commission.

In brokered advances, the buy rate is the factor rate the funder offers to the broker; the broker adds points to arrive at the rate you see (the sell rate). The difference is the broker’s commission, paid by you through the higher factor. Asking a broker for the buy rate is a fair question; some will disclose it, some will not.

How it appears in a contract

Not usually shown to the merchant; the sell rate appears as the factor rate.

Worked example

A buy rate of 1.18 marked up to a sell rate of 1.28 on $30,000 adds $3,000 to your payback as commission.

Illustrative figures on stated assumptions; not quotes.

What to ask

• Are you a broker, and what is your compensation on this deal?
• What is the buy rate?
• Are there fees on top of the factor?

Related terms

Factor rate · Origination fee · all terms