Pro rata

Definition

A share of something split in proportion to what each party already holds.

Why It Matters

It appears twice in a searcher's life and means the same thing both times: an investor's right to keep their percentage by funding their share of the next round, and the closing adjustment that splits rent, wages, and prepaid contracts between seller and buyer on the day itself. The second one moves real cash at closing and is settled in the purchase agreement, not on the day.

In numbers: A closing on the 20th of a 30-day month leaves the seller owing $2,000 of the $3,000 rent, credited to the buyer on the closing statement.