Before You Sign

A factor rate is not an APR. New York and California require funders to disclose an estimated APR. Ask for it in writing. You can also verify it yourself at gradino.com in 60 seconds using your actual terms.

Confirm the funded amount multiplied by the factor rate matches what is written on the contract cover page. Make sure the number you see verbally matches the number you are signing.

Origination fees, broker fees, wire fees, and processing fees reduce the amount that actually reaches your account. Your real cost is calculated on money received, not the funded amount on the cover page.

Some contracts include monthly maintenance or compliance fees for the life of the agreement. Ask for a complete list of all fees in Appendix A or the fee schedule before signing.

A COJ allows a funder to obtain a court judgment in certain circumstances without prior notice. Ask whether your contract contains one and what specifically triggers it. New York merchants should ask whether the 2019 out-of-state restriction applies to their situation.

Some agreements include language giving the funder access to your banking information and account reporting. Ask exactly what access is required and for what purpose. Understand what you are authorizing before signing.

A power of attorney gives the funder certain legal authority to act on your behalf in specific situations, typically tied to a default event. Ask what triggers it and what actions it authorizes so you understand the scope.

Ask for the full list of default events. In some contracts, a single missed payment, changing your bank account, or taking additional financing can trigger acceleration — meaning the full remaining balance becomes due immediately.

Reconciliation allows you to request a payment adjustment if your revenue falls. Ask whether your contract includes this protection, how to request it, and what documentation is required. This is one of the most important terms to understand.

Anti-stacking clauses are common in MCA agreements. Ask exactly what types of financing are restricted, for how long, and what the consequences are if you need additional capital during the term of this agreement.