{"ok":true,"canonical_url":"https://dealroom.so/glossary/advance-rate","api_url":"https://dealroom.so/api/public/glossary/advance-rate","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"advance-rate","term":"Advance rate","aka":"Discount","group":"The loan itself","definition":"The percentage of a collateral's value a lender is willing to finance. For a buyer, this determines how much of your loan can be secured by specific assets like accounts receivable or inventory, impacting your collateral shortfall.","what_it_means":"Lenders apply advance rates to different types of collateral, such as 75-85% for accounts receivable or 50% for inventory. If the total loan amount exceeds the available collateral after applying these rates, you'll have a collateral shortfall that needs to be addressed, often with a personal guarantee or additional assets.","url":"https://dealroom.so/glossary/advance-rate","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"collateral","term":"Collateral","url":"https://dealroom.so/glossary/collateral"},{"slug":"collateral-shortfall","term":"Collateral shortfall","url":"https://dealroom.so/glossary/collateral-shortfall"},{"slug":"accounts-receivable","term":"Accounts receivable","url":"https://dealroom.so/glossary/accounts-receivable"},{"slug":"inventory","term":"Inventory","url":"https://dealroom.so/glossary/inventory"}],"related_questions":[{"question":"Can a credit card cash advance be used for my down payment?","url":"https://dealroom.so/sba-loans/basics/can-a-credit-card-cash-advance-be-used-for-my-down-payment"},{"question":"Can I use funds from a personal credit card cash advance for my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-i-use-funds-from-a-personal-credit-card-cash-advance-for-my-equity-injection"},{"question":"How does a lender verify equity injection from a borrower's personal credit card cash advance?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-equity-injection-from-a-borrower-s-personal-credit-card-cash-adva"},{"question":"What alternative base rates are available for variable-rate 7(a) loans besides the Wall Street Journal Prime rate?","url":"https://dealroom.so/for-lenders/questions/what-alternative-base-rates-are-available-for-variable-rate-7-a-loans-besides-the-wall-str"},{"question":"What is the 'Prime Rate' when talking about SBA 7(a) loan rates?","url":"https://dealroom.so/sba-loans/basics/what-is-the-prime-rate-when-talking-about-sba-7-a-loan-rates"},{"question":"What specific alternative base rates are permissible for variable rate 7(a) loans?","url":"https://dealroom.so/for-lenders/questions/what-specific-alternative-base-rates-are-permissible-for-variable-rate-7-a-loans"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Advance rate","url":"https://dealroom.so/glossary/advance-rate","source_type":"DealRoom Data"}}