funding-vocabulary

name	funding-vocabulary
description	Domain literacy for MCA and alternative business funding. Reference glossary and clarifying-question guide for when operators use ambiguous terms.
triggers	["what does X mean","funding vocabulary","what is a factor rate","what is holdback","explain the terms","what does stacking mean","MCA glossary"]
tier	stable
disable_model_invocation	false

Funding Vocabulary

Where these endpoints live: This skill does not call REST endpoints directly — it is a reference/glossary skill. However, any /api/... URLs referenced in related skills are routes on the OASIS Command Center dashboard (repo: CC90210/oasis-command-center, deployed at https://agent-dashboard-sigma-eight.vercel.app). They are NOT served by this repo's local scripts/api_server.py (which only exposes /health, /status, /sms/send, /webhook/jotform). Solara's bridge makes authenticated fetch calls into the dashboard's API surface, and the dashboard then writes to Supabase / queues threads / dispatches the 8 daemons in this repo.

Purpose

Shared language between Solara and the SunBiz team. When Ezra, Jordan, Ethan, or Emily use an ambiguous term, ask the right clarifying question. When surfacing data to the team, use precise industry language — never generic finance terms.

Core Glossary

Deal Economics

Term	Definition
Factor rate	Cost multiplier on an MCA. A $50K advance at 1.38 = $69K total payback. Not an interest rate. Never call it one.
Buy rate	The factor rate at which the funder purchases the receivables (what SunBiz pays the lender). The spread between buy rate and sell rate (the merchant-facing rate) is SunBiz's margin.
Holdback	The percentage of daily revenue deducted for repayment (e.g., 15% holdback means 15% of each day's revenue goes to payback). Used in revenue-based repayment MCAs.
Fixed daily ACH	A fixed daily dollar amount debited from the merchant's bank account, regardless of revenue. More common than holdback in practice.
Payback period	Estimated duration to repay the advance at the daily payment rate. Not contractually fixed in revenue-based MCAs.
RTR (Right to Receive)	The receivables that SunBiz / the funder has purchased. The advance is the purchase price; the RTR is the future revenue stream purchased.
Total payback	advance_amount × factor_rate. This is what the merchant owes in total.
ISO commission	The broker fee paid to SunBiz Funding by the funder upon closing. Typically 8–15% of the advance amount depending on funder relationship.

Products

Term	Definition
MCA (Merchant Cash Advance)	Purchase of future receivables. NOT a loan. SunBiz's primary product.
LOC (Line of Credit)	A revolving credit facility. The Phase 4 goal in SunBiz's multi-phase consolidation strategy — lower cost, more flexibility than MCA.
Term loan	Fixed repayment schedule, fixed interest, fixed term. More traditional; requires stronger credit profile.
SBA loan	Government-backed loan. Long process (weeks to months), best terms. Usually not a fit for SunBiz's merchant profile.
Revenue-based financing	Repayment tied to a % of revenue, not a fixed daily amount. True holdback model.

Deal Risk & Position

Term	Definition
Position	One active MCA advance on a merchant. A merchant with 3 active advances has 3 positions.
Stacking	A merchant taking a new MCA on top of existing ones without the existing funder's knowledge. Violation of most MCA contracts. Funders check for this.
Syndication	Multiple funders sharing a single advance. SunBiz may participate as a syndicator on larger deals.
Leverage %	(total_daily_payments / daily_revenue) × 100. A merchant paying $800/day with $2,000/day revenue is at 40% leverage. Above 40–45% = overleveraged.
NSF (Non-Sufficient Funds)	A failed bank transaction due to insufficient balance. NSF count is the primary risk signal funders look at. More than 5 NSFs in 90 days = near-automatic decline at most funders.
Default	Merchant stops making payments on the advance. Can trigger UCC lien enforcement, collections, or legal action.
UCC (Uniform Commercial Code) lien	A security interest filed against the merchant's assets by the funder. Most MCAs file a UCC-1 as collateral.

Underwriting

Term	Definition
Paper grade	A/B/C/D classification of the deal risk. A = clean, strong; D = death spiral. See skills/underwriting-flow/SKILL.md for grading criteria.
Readiness score	Solara's 0–100 composite score reflecting the deal's shopability. Combines revenue, leverage, NSF, positions.
Bank statements	3–4 months of merchant's business bank statements. Primary underwriting document. Funders require them to calculate revenue, NSF count, and existing payment obligations.
Voided check	Required to verify the merchant's bank account for ACH setup.
Stipulations (stips)	Additional documents or conditions a funder requires before approving. Examples: tax returns, proof of ownership, lease agreement, driver's license.

Lender Relationship

Term	Definition
Submission	Sending a deal package to a funder for review.
Approval	Funder agrees to fund the deal, usually with specific terms.
Counter	Funder offers different terms than requested (lower advance, higher rate, shorter term).
Decline	Funder passes on the deal. Always log the reason in lender_feedback.
Lockbox	A dedicated bank account controlled by the funder, through which the merchant routes all revenue. Used for revenue-based MCAs as the holdback mechanism.

Clarifying Questions

When Ezra uses an ambiguous term, ask the right question instead of guessing:

Ezra says...	Right clarifying question
"They want better terms"	"Better in which direction — lower factor rate, longer term, or higher advance amount?"
"The deal is stacking"	"Do you mean the merchant has undisclosed existing positions, or we're considering placing on top of an existing advance?"
"The funder wants more"	"More what — more documents (stips), a higher payback amount, or a larger advance?"
"Clean the file up"	"Clean in which sense — remove old NSFs from the narrative, restructure the submission package, or address a specific lender question?"
"It's not moving"	"Not moving at which stage — underwriting, submission to lenders, or merchant decision?"

Language Rules (Compliance)

Always use correct language with merchants and in any external communication:

Say this	Not this
Advance	Loan
Funding / capital	Money / debt
Factor rate	Interest rate / APR
Funder / capital partner	Lender
Merchant	Borrower
Remittance	Repayment
Purchase of receivables	Loan repayment

Related Skills

• [[skills/underwriting-flow/SKILL.md]] — uses paper grade and readiness score terms
• [[skills/lender-intelligence/SKILL.md]] — uses decline reason codes and lender relationship terms
• [[skills/shop-out-routing/SKILL.md]] — uses submission, approval, counter, decline flow
• [[skills/lending-industry/SKILL.md]] — broader regulatory and compliance context