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Fixed payment
Also called specified daily amount, fixed daily payment, fixed weekly payment.
A set dollar amount debited on schedule regardless of what the business collected that day, as opposed to a percentage of receipts that moves with sales.
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
Two ways to collect an advance. A split or holdback structure takes a stated percentage of card settlements, so collections fall automatically when sales fall. A fixed structure takes the same dollar amount every banking day whatever happened in the business.
Fixed collection is far more common because it is simpler to originate and does not require a relationship with the processor. What supposedly makes it acceptable is the reconciliation clause, which allows the remittance to be adjusted to track actual receipts.
Whether that clause functions is a question about its drafting. Read who may request reconciliation, how often, what documents must be provided, how long the funder has to respond, whether an adjustment is mandatory when the arithmetic supports it or discretionary, and whether it applies retroactively as a refund or only going forward.
Where this one catches people
A fixed daily amount is only variable if the reconciliation actually works, and many clauses are written so it does not: requests limited to once a month, documents that take a week to assemble, a response window with no deadline, and adjustment at the funder's sole discretion. This is not just a cash flow issue. Courts assessing whether an advance is really a disguised loan look hard at whether reconciliation is genuine, so the clause you cannot use is also the clause the funder is relying on.
Where you will meet this term
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Fixed payment — common questions
What does fixed payment mean?
A set dollar amount debited on schedule regardless of what the business collected that day, as opposed to a percentage of receipts that moves with sales.
Where does fixed payment catch people out?
A fixed daily amount is only variable if the reconciliation actually works, and many clauses are written so it does not: requests limited to once a month, documents that take a week to assemble, a response window with no deadline, and adjustment at the funder's sole discretion. This is not just a cash flow issue. Courts assessing whether an advance is really a disguised loan look hard at whether reconciliation is genuine, so the clause you cannot use is also the clause the funder is relying on.
Is fixed payment the same as an interest rate?
Fixed payment 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 fixed payment apply to?
Merchant Cash Advance, Working Capital, Revenue-Based Financing.
Is there a worked example of fixed payment?
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 fixed payment?
Daily debit, Daily remittance, Future receivables, Holdback, Reconciliation.
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.