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Definition
The prepayment percentage is another name for the advance rate in invoice finance — the proportion of each invoice the financier pays up front. A prepayment percentage of 85% means you receive 85% of every qualifying invoice immediately.
In plain terms
It is the headline number that tells you how much cash a facility will release: multiply your eligible ledger by the prepayment percentage to see roughly the working capital available. The rest follows when customers pay.
Why it matters
Compare prepayment percentages and fees together when weighing facilities. See advance rate.
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