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Disbursement
Also called funding disbursement, payout.
The actual movement of money at closing, whether to the business, to a vendor, or to pay off another creditor, itemized on the closing statement.
Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.
What it means
Disbursement is the event, and the closing statement is the record of it. Small-business facilities disburse by same-day wire or by ACH, and the choice affects timing more than anything else: a wire sent before the bank's cutoff lands the same afternoon, an ACH credit typically the next business day.
Many deals disburse to more than one place. Fees come off the top, payoffs go to existing funders, and equipment finance frequently pays the vendor directly rather than the borrower, sometimes in stages against progress or on delivery and acceptance.
SBA and construction facilities disburse against conditions, meaning the money is committed but released only as documentation, inspections, or milestones are satisfied. A commitment and a disbursement are separated by everything on the conditions list.
Where this one catches people
Cost is calculated on the gross amount, not on what arrives. Every fee netted out of proceeds and every payoff routed to another creditor is money you are paying the full cost on and never had. Compare offers on net cash received against total repaid, which is the only comparison that describes your actual position.
Where you will meet this term
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Disbursement — common questions
What does disbursement mean?
The actual movement of money at closing, whether to the business, to a vendor, or to pay off another creditor, itemized on the closing statement.
Where does disbursement catch people out?
Cost is calculated on the gross amount, not on what arrives. Every fee netted out of proceeds and every payoff routed to another creditor is money you are paying the full cost on and never had. Compare offers on net cash received against total repaid, which is the only comparison that describes your actual position.
Is disbursement the same as an interest rate?
Disbursement is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.
Which products does disbursement apply to?
Merchant Cash Advance, Term Loan, SBA Loan, Equipment Financing.
Is there a worked example of disbursement?
Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.
What else should I read alongside disbursement?
Funding amount, Funding date, Funding statement, Net funding, Payoff letter.
Has this definition been checked?
Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.
Is this legal advice?
No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.
Can I suggest a term?
Yes — [email protected]. The glossary grows from what people are actually shown in contracts.