Cash Advance is not a new invention. It has been around for some time and was named with all kind of different names and still does. Cash Advance is simply factoring with a tiny twist. What do I mean by that? Well, in factoring, the "funder" buys the merchant’s invoices at a discounted rate (factored rate) and pays the merchant in advance for invoices that are net 30/60/90 days. The factoring rate is derived from the term (amount of time the funder needs to wait) of the invoice and other parameters like payback likelihood.

Cash Advance does the same exact thing with a twist. “What is the twist?” You are asking. There are NO attached invoices, so it’s more generic and the "funder" collects against all the receipts rather than a few specific predetermined invoices. The benefit of this way of funding is that usually the payment to the "funder" is small and occurs on a daily basis. The merchant always gets the largest portion of the sale as agreed in advance.