Retrieval Rate | MCA Glossary

Definition

Another term for holdback percentage — the proportion of daily card sales or revenue that an MCA funder collects each day toward repayment.

Explanation

Retrieval rate is used interchangeably with holdback percentage and remittance rate across different MCA funders and agreements. All three terms describe the same concept: the daily collection percentage applied to the business's revenue until the purchased amount is fully satisfied. The terminology varies by funder and sometimes by region. Funders who structure advances as a purchase of future receivables more commonly use "retrieval rate" to reinforce the legal framing that the funder is retrieving its purchased property — the receivables — rather than collecting loan payments. This framing has historically helped funders argue that MCAs fall outside lending regulations. From a practical standpoint, the retrieval rate functions identically to the holdback percentage. A 12% retrieval rate means the funder retrieves 12 cents of every dollar in card sales until the total purchased amount is collected. The business retains 88 cents of every dollar during the repayment period.

Example

A clothing boutique with a $40,000 purchased amount and a 10% retrieval rate retains 90% of every card transaction for operating expenses. On a $150,000-per-month revenue baseline, the store remits approximately $15,000 per month to the funder and retains $135,000 for operations.

Why It Matters

Whether a contract calls it a retrieval rate, holdback percentage, or remittance rate, the number represents the same daily cost to your cash flow. Comparing this percentage across offers — along with factor rates — gives you the full picture of an advance's daily impact. A lower retrieval rate preserves more operating cash even when the total purchased amount is identical across competing offers.

Frequently asked questions

Is retrieval rate the same as interest rate?

No. A retrieval rate is the percentage of daily sales collected toward the purchased amount — it does not represent an annual cost or an interest charge. The MCA structure is legally framed as a purchase of receivables, not a loan, so "interest rate" terminology does not directly apply. However, you can calculate an equivalent APR by annualizing the total cost (purchased amount minus advance amount) relative to the advance period. This equivalent APR is typically far higher than a traditional interest rate.