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Johny Fernandez: All right the
last question is what is the

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difference between hold a hold
back account and interest rate?

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Sean Murray: Okay, so what is
the difference between a hold

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back and an interest rate? So
the hold back, the hold back is

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a term that comes from merchant
cash advance, it's usually a

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percentage, the hold back
percentage, this number will

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appear very prominently on a
merchant cash advance contract.

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It is not the interest rate. So
I'm glad that you asked, I'm

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glad other people are asking
that question it's not the first

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time that people have come up
with that question. It's even

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been, it's even come up in in
court. I've seen it in court

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cases where the idea of what
that percentage represents in

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the contract has to be debated
and explained. So I hold that

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percentage is the percentage of
funds that the MCA company

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collects from daily deposits or
revenue from a merchant.

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Johny Fernandez: So would they
be able to use that towards the

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interest rate?

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Sean Murray: So let's just let's
just let's just stay with the

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hold back right now, we're
sticking with the hold back,

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let's say, let's say a small
business has gotten an MCA, the

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hold back percentage on the
contract is 15%. Yeah, not an

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interest rate, the hold back
percentage, on the first day

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after they got funded, they had
$100 worth of sales deposited in

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their account. That's where the
hold back comes into play. The

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MCA company looks at the hp;d
back percentage 15 and applies

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it to the $100 in revenue that
was deposited, and they hold

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back 15% of it, which in that
case will be 15%. Yeah, this

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number has nothing to do with
the interest rate itself, the

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interest rate is how much money
are you paying on the money that

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you borrowed? Right, this is
just how much are you collecting

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from a deposit? Two totally
different things. Yeah. So if

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you're if you're a broker and
you're explaining the product

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and someone says, what is the
hold back percentage? Do not say

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it's the interest rate has
nothing to do with the interest

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rate, it's just that percentage
that's collected from deposits

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and applied to the receivables
that were purchased, the

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interest rate is the cost of the
money itself. And there is no

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interest rate in a merchant cash
advance. So already that type of

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question and I know with that
slot what's the difference

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between the two. Interest rates
do not even exist in merchant

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cash advances. That's something
that would only exist in a loan itself.