I have a merchant that just got a renewal from Pearl. He had a previous balance of $9k, and got an offer $25k, with a payback of $36,250. However, after paying off the previous balance, he is receiving $16k, but paying back the full $36,250. Unless my math is very wrong here, that is a 100% factor rate.

Why exactly would a merchant take this kind of money, in this position? Considering the full cost of the money, he will get a better rate at the loanshark down the block!!