Lending & investment · Defined
Advance rate
The percentage of an eligible cost or value that a financing arrangement allows to be funded.
Why it matters
The base and exclusions must be explicit. A maximum permitted rate is different from the amount actually approved for a particular draw, which may also reflect retainage and other conditions.
In practice
A project example
A funding arrangement covers only part of each eligible invoice, leaving the balance to be funded by equity.
General educational guidance from KOW Building Consultants. Examples are illustrative, not project records. The applicable contract, standard, program, and jurisdiction control the requirements for a specific assignment.