Split Funding (Split Withholding)
Split funding is a merchant cash advance repayment method where the funder collects its share directly from the merchant's card-processing settlements. The processor splits each batch of credit-card sales, routing a set percentage to the funder before the remainder reaches the merchant, so repayment tracks actual sales volume.
How it works
The merchant's card processor diverts an agreed percentage of every settlement batch to the funder; the merchant receives the rest. Because the split is a share of sales, the amount collected rises and falls with daily card volume.
Split funding vs fixed ACH
The alternative is a fixed daily or weekly ACH debit regardless of sales. Split funding collects less in slow periods but depends on the processor; fixed ACH is simpler but can overdraw a merchant when sales dip, the most common cause of a bounced remittance.
Servicing split remittances
Either way the funder matches many small variable remittances to the right advance and flags shortfalls. Zolvo reconciles daily and weekly remittances through payment matching for merchant cash advance portfolios.