Glossary · Funding
What is Advance rate
Definition
The percentage of an invoice a funder releases immediately. The remainder is held back as a reserve until the client pays.
Applies to: US and UK · Reviewed by James Doyle
In practice
An 90% advance rate on a $100,000 ledger releases $90,000 now and $10,000 later, less fees. Your usable cash is the advance rate, not the ledger value — model it that way.
Advance rates flex with client credit quality, debtor concentration and your own dilution history (credit notes, disputes, timesheet corrections).
Related terms
Invoice factoring
Selling your unpaid invoices to a funder at a discount for immediate cash. The funder advances most of the invoice value, then pays the balance on settlement.
ReadPayroll funding
A facility that pays your contractors each week and is repaid when your client settles the invoice, removing the cash gap from the agency's balance sheet.
ReadConcentration limit
A cap on how much of your funded ledger can sit with one client, commonly 25% to 35%. Invoices above the cap are funded at a lower rate or not at all.
Read
Put the theory to work.
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