How Much Can I Borrow Against Your Card Sales?

By the TouchSuite payments team · Updated 2026-11-06

Funders usually size an advance against card sales as a multiple of your average monthly card volume, often somewhere between half a month and one and a half months of sales as a loose rule of thumb, and then set a daily holdback percentage to repay it. The amount you can safely borrow is limited by how much of each day's card sales your margins can give up, and that is often less than the largest offer you receive.

Key takeaways

Offers are typically based on average monthly card deposits, not gross sales. Refunds, chargebacks, processing fees, and seasonal dips all shrink the number a funder sees.
Total payback is the advance times the factor rate. The daily holdback is a percentage of card sales. Together they set how long repayment takes.
Holdback comes out of gross card sales, not profit. A 10% holdback can consume more than your entire margin on those sales.
The best size for an advance is the one whose daily holdback fits within the cash flow you can spare, not the maximum a funder approves.
Run your own numbers before you talk to a funder, so you can compare offers on total payback and daily cash impact.

How funders turn your card sales into an offer

Funding against card sales, often structured as a merchant cash advance or a sales-based financing product, is underwritten mostly on your processing history. A funder typically reviews three to twelve months of merchant statements or bank deposits. It looks at average monthly card volume, how consistent that volume is month to month, refund and chargeback levels, time in business, and whether you already owe other funders.

From that review comes three numbers. The advance amount is usually expressed as a fraction or multiple of monthly card volume. The factor rate is a multiplier that sets total payback; factor rates around 1.1 to 1.5 are commonly quoted, but treat that as an assumption, not a standard. The holdback, or retrieval rate, is the percentage of each day's card sales that goes toward repayment.

Because repayment rises and falls with sales, there is usually no fixed term. Repayment length is simply the total payback divided by the dollars held back per day, and that depends on how much you sell.

A worked example: sizing an advance for a $40,000-a-month shop

Example only, with made-up numbers: a pet supply store processes $40,000 a month in card sales, about $1,333 a day over a 30-day month. Suppose it is offered an advance equal to one month of volume, $40,000, at an assumed factor rate of 1.30. Total payback is $40,000 × 1.30 = $52,000, so the cost of the money is $12,000.

At an assumed 12% holdback, the funder collects about $160 a day ($1,333 × 0.12), or $4,800 a month. Repayment takes $52,000 ÷ $4,800 ≈ 10.8 months if sales hold steady. If sales drop to $30,000 in a slow month, the holdback falls to $3,600 that month and repayment stretches out.

Now halve the advance. $20,000 at the same 1.30 factor means $26,000 in payback. At a 12% holdback that is repaid in about 5.4 months. If you negotiate the holdback down to 6%, it takes about 10.8 months, but the daily bite is only about $80. The same card volume supports very different deals depending on which lever you change.

Estimates are based on published industry averages and are not a quote. Actual rates depend on card mix, ticket size, industry, and underwriting.

Why the number a funder sees is smaller than your sales

Many owners estimate their borrowing power from gross sales. Funders usually work from what actually reaches your bank account, and several things sit in between. Processing costs come first: interchange paid to the card-issuing bank, card brand assessments, your processor's markup, and per-item fees. Example: $40,000 in gross card sales at an assumed 2.75% effective rate costs $1,100. Subtract $800 in refunds and the deposits a funder sees are about $38,100.

Holds and reserves also reduce visible volume. If your processor keeps a rolling reserve, for instance holding a percentage of each batch for a set number of days, that money does not appear as deposits until it is released. A batch frozen for review can create a gap that looks like a sales drop. Chargebacks show up twice: as money pulled back out, and as a risk signal that can lower the offer or raise the factor rate.

Seasonality matters too. A funder may weight your weakest months more heavily than your average, because those months determine whether the holdback can be collected. Card-not-present businesses and higher-risk segments are often offered smaller multiples. An existing advance usually reduces or blocks a new one, because two holdbacks would draw on the same daily sales.

Run your own numbers

Estimate how much working capital your card sales could support and what the daily holdback would be.

Open the free Merchant Funding Payback Estimator Book a 15-minute call

What most articles get wrong: the maximum offer is not your capacity

Most guides answer the question with a multiple of monthly sales and stop there. That tells you what a funder might approve, not what your business can absorb. The holdback comes off the top of gross card sales. Your rent, payroll, and inventory still have to be paid from what remains.

Example only: a full-service restaurant runs $60,000 a month in card sales with an assumed 8% operating margin on those sales, about $4,800 a month before debt. A 10% holdback takes $6,000 a month. That is more than the restaurant earns on the sales being held back, so the gap comes from cash reserves or late bills until the advance is repaid. The offer may be technically approvable and still be a bad size for this business.

A better test is to start from your cash flow. Work out how many dollars a month you can give up without falling behind on fixed costs, including a slow month. Then convert that into a holdback percentage and an advance size. If the funder's proposed holdback is higher than that number, ask for a smaller advance or a lower holdback over a longer period.

Run your own numbers before you apply

Our free Merchant Funding Payback Estimator (https://touchsuite.com/tools/merchant-funding-payback-estimator) does this math for you. Enter your average monthly card volume, your industry, the advance amount you are considering, a factor rate, and a holdback percentage. You immediately see the estimated total payback, daily holdback in dollars, and approximate months to repay, with no sign-up required to see those results.

If you want the full breakdown, you can request it. That includes a month-by-month repayment view under slower-sales scenarios and a comparison of different advance sizes. Use it to set your own ceiling before an offer arrives, so you are not anchored by the biggest number on the page. All figures are estimates. Estimates are based on published industry averages and are not a quote. Actual rates depend on card mix, ticket size, industry, and underwriting.

How to qualify for a better-sized offer

Clean up what underwriters read. Consistent daily batching, low refund and chargeback levels, and statements without unexplained gaps all support a stronger offer. If your processing is split across several accounts, funders may see only part of your volume. Consolidating it can make your real sales easier to verify.

Compare offers on two numbers only: total dollars repaid and daily dollars held back. A larger advance with a high holdback can leave you worse off than a smaller one you can carry comfortably. Before you sign, ask whether the holdback is a split from your processor or a fixed debit from your bank account, whether there is any early payoff discount, and what happens to collections if sales drop.

If you want help working out what your card sales can realistically support, talk to a payments specialist at https://touchsuite.com/contact. Bring three to six months of statements and your estimate of what you can spare each month.

Frequently asked questions

Is borrowing against card sales a loan?

It depends on how the product is structured. Many card-sales funding products are set up as a purchase of future receivables rather than a loan, which affects how costs are expressed and how the product is regulated. Rules vary by jurisdiction, so read the agreement closely and ask the funder how its product is classified.

How is the daily holdback calculated?

It is usually a fixed percentage of each day's card sales. Example: with $1,500 in card sales and a 10% holdback, $150 goes to repayment that day. Some products instead debit a fixed daily or weekly amount from your bank account based on estimated sales, so ask which method applies.

Do funders use gross sales or deposits?

Most look at what actually reaches your account, after processing fees, refunds, chargebacks, and any reserves. That is why your borrowing power is often lower than a calculation based on gross sales would suggest.

Can I get a second advance if I already have one?

Some funders will not offer one, and others may offer a smaller amount. Two holdbacks drawing on the same daily sales can strain cash flow quickly. Add up both daily payments against your margin before considering it.

What is a safe amount to borrow?

There is no universal number. A practical approach is to work out the monthly dollars you can spare without missing fixed costs in a slow month, then size the advance so the holdback stays within that figure. The Merchant Funding Payback Estimator can help you test different sizes.

How we put this together

The worked examples use made-up business figures chosen to be realistic, not data from real merchants. Factor rates, holdback percentages, sizing multiples, and the 2.75% effective processing rate are labeled assumptions based on commonly quoted industry ranges and the stated assumptions in our estimator. They are not TouchSuite pricing or approval criteria. Processing-cost mechanics (interchange, card brand assessments, processor markup, per-item fees, reserves) reflect how card processing is generally structured. Actual interchange varies by card type and transaction and is published by the card brands. Before relying on any figure, check your own merchant statements for net deposits, refunds, chargebacks, and any reserve or hold, and confirm every term in a written funding agreement. Figures reflect general market conditions at the time of writing and can change. Estimates are based on published industry averages and are not a quote. Actual rates depend on card mix, ticket size, industry, and underwriting.