Hazelford Funding, a small-business funding service in Lebanon, Tennessee, arranges merchant cash advances through partners for card-heavy businesses such as restaurants and shops. A merchant cash advance is not a loan: the partner buys a share of future card or bank receipts at a discount and collects it from daily sales until the purchased amount is remitted. Partners set the holdback and total payback.
| Limited-service restaurant employers, Wilson County, TN | 135 payroll sites (2023 CBP release) |
|---|---|
| Wilson County, TN shops with payroll | 485 payroll sites (2023 CBP release) |
| Loan status | No: a purchase of a share of future receipts |
How does a merchant cash advance work for a Lebanon, TN business?
In a merchant cash advance, a partner pays the business a lump sum today in exchange for a larger amount of its future receipts. Collection happens automatically: either a fixed percentage of each day's card sales, called the holdback, or a set daily or weekly debit from the bank account, depending on the agreement. Collection continues until the full purchased amount has been remitted.
Because collection follows sales, a slow week means less is collected that week. That is the main structural difference from a loan, where payments are fixed regardless of sales.
Loan or receivables purchase: what a merchant cash advance really is
No. A merchant cash advance is a sale of future receipts, and it is not a loan. There is no interest rate in the usual sense; the cost is the difference between the purchased amount and the advance. That also means loan comparisons can mislead, so compare total cost and how long collection is likely to run.
Holdback percentage, explained with card sales
The holdback is the share of each day's card receipts that goes to the partner until the purchased amount is collected. A higher holdback collects faster but leaves less cash in the business each day. When comparing offers, look at the holdback alongside the total purchased amount, because a lower holdback can simply stretch collection over more days.
Merchant cash advance example
Illustration only, not an offer: the cost of an advance is set by its factor. Each 0.1 in the factor adds $10 for every $100 advanced, so the higher the factor, the more of the business's future receipts the partner has bought.
Collection time is simple division. Illustration only, invented figures: suppose the agreement says $12,000 of receipts must be remitted, and the holdback works out to $150 on an average day of card sales. Then $12,000 divided by $150 is 80 business days. If daily sales dip, the daily amount falls and the days stretch; if sales rise, collection finishes sooner.
The guides and calculator page lists Hazelford's tools; for a fixed-payment comparison, the comparison page sets the advance beside the loan options.
Advance or business loan: the structural differences
| Merchant cash advance | Business loan | |
|---|---|---|
| What it is | Bought receipts the business has yet to earn | Borrowed money |
| Cost expressed as | The factor times the advance | Interest and fees |
| Collected or repaid | A share of daily sales is collected | Fixed installments, paid back on schedule |
| Slow week | Less is collected | Same payment every period |
Advance or revolving line?
A line of credit lets a business draw only what it needs and pay interest on the drawn balance, and it can be used again. An advance is a single purchase: once remitted, a new agreement is needed. A line may fit better where card sales are steady and the need recurs; an advance suits a single near-term need.
Compare the advance with working capital as well, since both cover short-term operating costs.
Five numbers to find in an advance contract
Before comparing an advance with anything else, find these five items in the agreement. They decide what the advance really costs and how it feels day to day.
- The advance amount actually deposited, after any deductions.
- The factor rate, which sets the total to be collected.
- The holdback percentage taken from daily card sales.
- Whether collection is a share of sales or a fixed daily debit.
- What happens if sales fall: any reconciliation or adjustment clause.
Illustration only: an advance of $20,000 at a factor of 1.3 means $26,000 is collected in total. At a 12% holdback on $2,000 of daily card sales, the collector takes $240 a day, so collection takes about 108 selling days. If daily sales drop to $1,500, the take falls to $180 and collection stretches to about 145 days. The figures are an example, not an offer.
An advance is a purchase of future receivables. It is never a loan, and the amounts above are collected, not repaid. If the need repeats, compare it with a line of credit.
Which Wilson County, TN businesses fit a merchant cash advance
Businesses with heavy daily card sales: restaurants, cafes and coffee bars and retail stores. Wilson County, TN had 135 limited-service restaurant employers and 485 retail employers in 2023 (County Business Patterns 2023). Local figures are on the Lebanon, TN page, and the industries page lists other trades. The step order is on how a Hazelford request works.
