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Net funding amount
Also called net amount funded, net proceeds figure, net wire amount.
The exact figure that will land in your bank account after every deduction — the one number worth demanding in writing before you sign anything, and the one nobody volunteers.
Drafted with AI assistance and checked by a person. Its factual claims were verified against the sources listed at the end, by Find Me Funders research desk.
What it means
Ask for it by name: what is the net funding amount that will hit my account, in dollars, in writing? Every funder can produce it before closing. A broker who cannot or will not is telling you something useful.
What comes out
- Origination, underwriting, administrative or programme fees, usually a percentage of the gross
- ACH or wire charge, and a UCC filing fee
- Broker compensation where it is deducted at funding rather than paid by the funder
- Payoff of any existing position being retired
- An escrow, reserve or first-payment holdback
- On equipment deals: documentation fee, sales tax, and frequently the first and last payment taken up front
Why it is not just a subtraction
Cost is computed on the gross. On a factor-rate advance the purchased amount is the purchase price times the factor, and the purchase price is the pre-deduction figure. On an interest-bearing loan, interest accrues on the full principal advanced, including the part that went straight back out as fees. Deducting 6,000 from a 100,000 advance does not make it a 94,000 advance for pricing purposes; it makes it a 100,000 advance that delivered 94,000.
Disclosure
New York's Commercial Finance Disclosure Law and California's commercial financing disclosure regime require covered transactions to disclose an amount financed net of specified deductions alongside total cost figures. The covered transaction types, thresholds and line names differ between the two and have been amended, so read the disclosure form you are handed and check the current regulations rather than assuming a particular line exists.
Where this one catches people
The headline rate is a percentage of what you are charged. The net funding amount is what you can spend. Those two figures are related only loosely, and the relationship gets worse the more the deal involves a payoff.
A payoff of an existing position is not new money, but under a factor structure the new advance's cost is calculated as though it were. The industry calls the resulting overlap double-dipping, and it is why a "consolidation" that lowers your daily payment can raise your total obligation substantially.
Compare offers on two numbers only: net cash received, and total dollars repaid. Ignore the factor, ignore the rate, ignore the term until those two are on the page.
Worked through
Illustrative. Purchase price 150,000 at a 1.40 factor. Purchased amount 210,000, so the stated cost is 60,000.
Deducted at funding: origination fee 7,500, wire fee 75, UCC filing fee 90, and a 52,000 payoff of an existing advance.
Net funding amount: 150,000 − 7,500 − 75 − 90 − 52,000 = 90,335.
You owe 210,000. New usable cash is 90,335. Cost per dollar of new money: 60,000 ÷ 90,335 = 0.66. Sixty-six cents of cost for every dollar of fresh capital, against a headline that says forty.
Remove the payoff and the picture changes entirely: net funding 142,335, and 60,000 ÷ 142,335 = 0.42. Same factor, same fees, completely different transaction — which is why the payoff figure and the net figure both have to be on the page before you sign.
Figures in the example are illustrative. They show the arithmetic, not a quote — what any one lender would charge is on that lender's page, where it is published at all.
Where you will meet this term
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Sources and checks
Every figure on this page traces to a document someone read, on a date. Where a check is past its review date it says so rather than passing as current.
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150,000 at 1.40 with 7,665 of fees and a 52,000 payoff nets 90,335, giving 66 cents of cost per dollar of new money against 42 cents without the payoff
example150,000 x 1.40 = 210,000 purchased amount; cost 60,000. Deductions 7,500 + 75 + 90 + 52,000 = 59,665; 150,000 - 59,665 = 90,335 net funding. 60,000 / 90,335 = 0.6642, i.e. 66 cents. Without the payoff: 150,000 - 7,665 = 142,335, and 60,000 / 142,335 = 0.4215, i.e. 42 cents. Both figures as stated.
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New York's Commercial Finance Disclosure Law does require a disclosed funding figure net of deductions alongside total cost figures
definition23 NYCRR 600.6(b) (sales-based) and 600.10(b) (closed-end) require a first-row 'Funding Provided' disclosure showing the amount financed with the explanation 'This is how much funding [financer name] will provide,' and 600.3(a) requires the annual percentage rate to be disclosed with the specific offer.
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California's regime likewise requires a funding figure stated net of origination charges and payoffs of other financings
definitionThe California disclosure regulations require a 'Funding You Will Receive' line, defined as 'the amount of funds that will be provided to the recipient, excluding any deductions such as origination charges and amounts used to pay off other financings' (s 2061(a)(2)(B) and parallel provisions), which is exactly the payoff-inclusive deduction the entry describes.
Net funding amount — common questions
What does net funding amount mean?
The exact figure that will land in your bank account after every deduction — the one number worth demanding in writing before you sign anything, and the one nobody volunteers.
Where does net funding amount catch people out?
The headline rate is a percentage of what you are charged. The net funding amount is what you can spend. Those two figures are related only loosely, and the relationship gets worse the more the deal involves a payoff.
Is net funding amount the same as an interest rate?
Net funding amount 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 net funding amount apply to?
Merchant Cash Advance, Working Capital, Term Loan, Equipment Financing, Revenue-Based Financing.
Is there a worked example of net funding amount?
Yes, on this page, and it is labelled illustrative. It shows the arithmetic, not a quote from any lender.
What else should I read alongside net funding amount?
Commercial financing disclosure law, Double dipping, Draw fee, Net funding, Origination fee.
Has this definition been checked?
Yes. Its claims were verified against the sources listed at the end of this page, and the reviewer is named.
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.