In a merchant cash advance, the holdback (or retrieval rate) is the fixed percentage of revenue the funder collects as remittance, usually daily or weekly, until the agreed payback is met. Because it is a percentage of sales, the dollar amount rises in busy periods and eases in slow ones.
Holdback vs factor rate
These are two different numbers. The factor rate sets the total payback (for example, 1.30 means you repay 1.3 times the advance). The holdback sets how fast you repay it — a percentage of revenue collected each day or week. A higher holdback pays the advance back faster; it does not change the total owed.
Why it matters
The holdback is what makes an MCA's payments flex with your cash flow, which protects a business through uneven or seasonal revenue. It is also why understanding the combined holdback across multiple positions matters before stacking.