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Wire fee
Also called wire transfer fee, funding fee, disbursement fee.
A charge for sending funds by wire rather than ACH, deducted from the amount disbursed so the business receives less than the approved figure.
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
A wire settles same day and is irrevocable; ACH is cheaper and settles the next business day or later. The fee buys the speed. Funders pass through their bank's charge and frequently add to it, and the amount is deducted at disbursement rather than billed separately.
It is small in isolation and belongs to a category that is not. Wire fee, origination or underwriting fee, documentation or processing fee, and any broker points are all typically netted out of the funded amount at the same moment. The business sees one number arrive and has to work backwards to understand what was taken.
The structural issue is that the repayment obligation is generally calculated on the gross approved amount, not the net received. Fees deducted at funding therefore increase the effective cost twice: once as money not received, and again because the payback is computed as though it had been.
Where this one catches people
Asking "what is the total cost" and getting the factor rate in reply leaves the netted fees out of the conversation entirely. The question that surfaces them is: what dollar amount will hit my bank account. Compare that number, not the approval amount, against the total repayment. A merchant approved for $50,000 who, after whatever is netted out, receives materially less and still repays on the full $50,000 base has a different deal from the one on the offer sheet.
Worked through
Illustrative only. $50,000 approved at a 1.30 factor, so $65,000 to repay. Deducted at funding: 4 percent origination ($2,000), $350 underwriting fee, $50 wire fee. Wired: $47,600. The business repays $65,000 against $47,600 received — $17,400 of cost, or about 37 percent of what actually arrived, against a factor implying 30.
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.
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Wire fee — common questions
What does wire fee mean?
A charge for sending funds by wire rather than ACH, deducted from the amount disbursed so the business receives less than the approved figure.
Where does wire fee catch people out?
Asking "what is the total cost" and getting the factor rate in reply leaves the netted fees out of the conversation entirely. The question that surfaces them is: what dollar amount will hit my bank account. Compare that number, not the approval amount, against the total repayment. A merchant approved for $50,000 who, after whatever is netted out, receives materially less and still repays on the full $50,000 base has a different deal from the one on the offer sheet.
Is wire fee the same as an interest rate?
Wire fee 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 wire fee apply to?
Merchant Cash Advance, Working Capital, Term Loan, Invoice Financing.
Is there a worked example of wire fee?
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 wire fee?
ACH debit, Net funding amount, Origination fee, Same-day funding, Total cost of capital.
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.