Merchant advances

A merchant advance purchases a defined amount of future receivables for an agreed purchase price. It is modeled separately from consumer installment loans: no nominal interest rate is used to manufacture a fixed payment schedule, and projected completion is never presented as contractual maturity.

Contract model

The public contract keeps five quantities distinct:

Product configuration may also define reporting frequency, reconciliation tolerances, permitted sales sources, minimum-remittance or reconciliation provisions, grace windows, and breach responses. Those terms are explicit fields; LendEasy does not infer them from the projected duration.

Lifecycle

Only funding moves an approved agreement to ACTIVE. A submitted payout is not enough; the purchase price posts when the rail confirms release of funds. Likewise, a sales report does not reduce the balance until its remittance settles and posts.

From sales to remittance

Northstar reports $11,875.40 of settled card sales for September 8–9. The contract applies a 12% remittance rate.

raw remittance      = $11,875.40 × 0.12
                    = $1,425.048
posted remittance   = round($1,425.048, 2)
                    = $1,425.05
remaining purchased = $60,000.00 − $1,425.05
                    = $58,574.95

The request records the sales window, source, gross settled sales, exclusions, adjustments, and provider report identifier. The response preserves the unrounded intermediate value and the rounding policy used to reach the posted amount.

POST /v1/merchant-advances/ma_northstar_6N8Q/sales-reports
Idempotency-Key: northstar-2026-09-09-v1

{
  "periodStart": "2026-09-08",
  "periodEnd": "2026-09-09",
  "currency": "USD",
  "settledSales": "11875.40",
  "source": "processor_report",
  "sourceReference": "settlement_884210"
}

{
  "salesReportId": "msr_91DC",
  "status": "accepted",
  "calculatedRemittance": "1425.05",
  "remainingPurchasedAmount": "60000.00",
  "nextAction": "collect_remittance"
}

The remaining amount is still $60,000 in this response because the report has calculated an obligation but has not yet settled money. The balance becomes $58,574.95 after the related remittance reaches POSTED.

Projected amortization is a forecast

LendEasy maintains a projected schedule so operators can see expected completion and emerging drift. The schedule consumes a sales forecast; it does not create fixed installments.

When actual sales arrive, the projection is regenerated from the posted remaining amount. Prior forecast versions remain addressable for audit and model-performance analysis.

Reconciliation and degraded data

Each reporting period is reconciled across three records:

1. the merchant or processor’s settled-sales report;
2. the remittance intent and payment-rail settlement; and
3. the posted ledger allocation.

Missing sales data is represented as UNAVAILABLE, never as zero sales. LendEasy can place the agreement in REPORTING_REVIEW, suspend automated collection, and open a case without declaring a breach. A breach requires a configured rule and the facts that rule names.

Breach and near-breach rules

Near-breach indicators are forward-looking: declining report freshness, remittance variance, repeated collection failures, or a projected completion date outside policy. Breach rules are contractual and versioned. Every evaluation stores:

• the rule and agreement version;
• the facts, source, and asOf time used;
• the outcome and next allowed actions; and
• any human approval or override.

The servicing plane can route a merchant-support workflow, request corrected reports, revise a permitted remittance arrangement, or escalate for legal review. It cannot fabricate sales, silently turn a forecast into a fixed payment, or collect more than the remaining purchased amount.

Events to consume

Related API resources

• POST /v1/merchant-advances creates an application.
• POST /v1/merchant-advances/{advanceId}/approve records the governed decision.
• POST /v1/merchant-advances/{advanceId}/funding-intents initiates the purchase-price payout.
• POST /v1/merchant-advances/{advanceId}/sales-reports records verified sales.
• POST /v1/merchant-advances/{advanceId}/remittances initiates or records a remittance.
• GET /v1/merchant-advances/{advanceId}/projection returns the versioned forecast.
• GET /v1/merchant-advances/{advanceId}/reconciliation explains source-to-ledger differences.