Collection method is how the Funder expects to receive the Payback Amount or Purchased Amount from the Merchant.

Funders can use the following collection methods to obtain the Payback Amount:

1.  ACH -- or (Automated Clearing House) The Merchant agrees to allow the Funder to retrieve a set amount of cash from its commercial bank on a daily, weekly or monthly basis. On a set time interval, the Funder would initiate a transaction with the Merchant’s bank to retrieve funds.

When ACH is selected as a collection method, the rate ($) is the daily dollar amount the Funder will debit from the Merchant's bank account. The above example states that the Funder use ACHWorks as the collector and debit the Merchant's bank account for $200 on a daily basis. This may or may not include weekends based on the agreement. 

The "Processor" and "Merchant #" fields is for reference only.

2.  Lockbox -- The Merchant and Funder agrees to put the Merchant’s daily receivables into a Lockbox company. The Lockbox company would divide up the Merchants receivables with the Funding Company based on agreed terms.

3.  Split Funding -- The Merchant has agreed to return a percentage of its daily receivables to the Funder by signing on to an agreed Payment Processor. The Payment Processor collect the funds from the Merchant and allocate the defined percentage of collections to the Merchant and the Funder on a set time interval.

Collection Method - Split Funding
When "Split Funding" or "Lockbox" is selected as the retrieval method, the Merchant has agreed to transfer its daily transactions to either a Payment Processor (for split funding agreements) or Lockbox company to divide the funds between the Merchant and the Funder.

To estimate amount is determined by the average monthly credit sales of the Merchant. The "Rate" in percentages is the amount the Funder expects to get from the average monthly credit card sales. The "Average Daily Retrieval" is the estimated amount the Funder will collect on a daily basis. These are estimated values to help the Broker/Funding Company structure the deal for the Merchant.

The above example shows the average monthly credit sales estimate to be $75,000 a month. The Funder is expecting to get 25% of the $75,000 which is $18,750. Using a 30-day calendar schedule, the $18,750 would mean $625 per day. 

The Processor and Merchant # are information to help estimate the deal.

A Deal can have multiple collection methods as Funder can opt to collect from multiple sources .