In reality, the merchant should be weary of this holdback percentage so that it does not affect cash flow negatively.  The higher the holdback percentage, the lower the cost of the money and thus merchants need to assess what the maximum percentage the business can actually withstand without harming cash flow.  If cost is not as much as a concern as holdback percentage, then merchants should consider taking out a longer program at a lower percentage.

For instance, if a merchant is looking to get through a difficult dry season, he may want to take out a longer program at a lower holdback percentage at the cost of expensive funding so that the capital will last longer and cash flow will not be harmed during the slow season.  On the other hand, if the merchant is looking for a quick infusion of cash to pay for an expansion plan or pay off some interest collecting debt, then he may want to consider a shorter program where the cost of the funding is cheaper but the holdback percentage is higher.  This way the merchant will be able to do the upgrades he is looking for, and will be finished paying back the advance within five to six months.

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