When we launched our invoice and receipt funding product in September 2022 (Invoice Funding) for customers to fund their working capital, we wanted to make sure our pricing and payment structure was easy to understand. For Clearco, this clarity was a conscious, intentional choice based on our desire to be transparent with our customers about the cost of the capital we advance them.

With our current fixed, flat free structure and weekly “fixed” payments, we believe we’ve achieved just that.

How Do Clearco’s Fees Work for Invoice Funding or receipt funding?

Clearco charges its customers a single, fixed, flat fee which is based on the financial health and performance of the business as well as the estimated term they want to pay the advance over (our 4-month advance is the cheapest, and the 6-month is most expensive - time value of money!).

Once a customer uploads an invoice or receipt they want to get funding for and sign the contract, the fee on the funding they receive is fixed and will not change. Moreover, that fee is not charged until the invoice or receipt is actually funded, meaning our customers only pay Clearco the fee once the capital has been put to use.

Let’s take the below example to better understand the fee structure:

Company ABC receives an offer from Clearco in July as follows:

• 5.00% fee for a 4-month advance
• 6.25% fee for a 5-month advance
• 8.00% fee for a 6-month advance

The estimated term reflects how many months the customer will make “fixed” weekly payments to Clearco before paying all advanced capital back to Clearco.

If Company ABC takes $1M of funding for a 4-month advance, they will pay a fee of $50,000, resulting in payments totaling $1.05M over 4 months.

Nice and simple – like we said, we wanted to have a simplified fee structure for our customers to understand and calculate what they owe us! 

The best part is, Clearco charges nothing to our customers until they decide to take funding from us - we don’t put surprise funds in your bank account to collect extra fees, and we don’t charge standby or unused line fees.

‍How Do Clearco’s Payments Work for Invoice Funding or receipt funding?

When a founder takes funding from Clearco, they select the estimated term they want to make payments over. In the example above, Customer ABC selected the 4-month option, meaning they will make 17 weekly payments to Clearco, starting the week after they took funding.

The fee and advance amount are spread equally across all payments. Continuing with the example, Customer ABC would make 17 weekly (or 4 months of) payments of roughly $62,000 to Clearco to pay the advance and fee. 

When we describe these payments as “fixed” or predictable, we do so with one qualification – and it’s a good one for our customers! How exactly?  Clearco’s Invoice Funding product gives Customer ABC revenue downside protection and flexibility if that customer experiences low or weaker-than-expected sales. We will never take more than the “fixed” amount of roughly $61,000 from Customer ABC, but if sales decline significantly in a week, Clearco will never take more than 30% of the customer’s revenue. Said differently, customers can take comfort not only in knowing exactly what payment they are scheduled to make to Clearco each week (versus a varying revenue remittance-based payment), but also in knowing that the only way that payment can change is if it decreases because their sales have fallen unexpectedly.

If Company ABC only did $100,000 in sales this week, instead of taking the “fixed” $62K payment, we would take $30,000 (or 30% of their revenues). We believe – and our customers regularly tell us – that this feature gives them the best balance between predictable payments for cash flow planning and the flexibility to manage slower revenue weeks. Company ABC would simply catch up the remaining balance by making an extra payment of roughly $32K at the end of the 4-months (i.e., extending it by one week). Just as important, there would be no extra fees or penalties for that lower payment.

Clearco Fees and Payments are Designed With Our Customers In Mind

Clearco's Invoice Funding product is designed for ecommerce brands who experience the often seasonal peaks and valleys of selling physical products. Clearco is able to support the rapid changes these businesses encounter by funding their inventory, marketing, and logistics.. We have designed Invoice Funding’s fee and payment structure to reflect that and to  support founders’ ability to grow their business. We communicate our fees with clarity not only because transparency is a core Clearco value but also because it allows our customers to run their businesses smoothly and with no surprises.

If you’re looking for a long-term capital partner, contact Clearco!