Monthly contribution to reserve:
How the estimate works
The calculator assumes steady monthly volume. Each month, the reserve rate is applied to processed sales and that amount is held for the holding period. Once the first cohort is released, the balance stops growing, so the steady-state amount equals one month's contribution multiplied by the number of 30-day cycles held. If you enter a cap, the result is the lower of that figure and the cap.
Worked example
- Monthly volume: $100,000
- Reserve rate: 10%, so $10,000 is added each month
- Holding period: 180 days, about 6 cycles
- Funds held at steady state: about $60,000
For the difference between time-based and balance-based holds, read rolling reserve vs capped reserve and the glossary entries for rolling reserve and capped reserve.
Frequently asked questions
How is a rolling reserve calculated?
A simple steady-state estimate multiplies monthly processed volume by the reserve percentage and by the number of 30-day cycles in the holding period. At $100,000 a month, a 10% reserve held for 180 days ties up about $60,000.
What is the difference between a rolling and a capped reserve?
A rolling reserve keeps holding a percentage of new sales and releases each cohort after the holding period. A capped reserve stops accumulating once an agreed balance is reached. The calculator's cap field approximates the second structure.
Why might my real reserve differ from this estimate?
Contracts can release funds daily or monthly, hold back for disputes, require a minimum balance or combine an upfront reserve with a rolling one. Volume also changes month to month. Use the result for planning, then read your agreement.