Compare / original field guide
Published 2026-08-29 · Sources reviewed 2026-09-01
How to compare business financing offers without being fooled by the payment
A field-by-field method for comparing cash delivered, fees, payment frequency, total repayment, collateral, guarantees, and exit terms.
For an owner with two or more offers that use different pricing language.
Quick answer
Quick answer
Two products can both be called “working capital” while creating very different obligations. Begin by writing down the actual cash that reaches the business and every amount the business may pay to obtain and retire it.
Start with dollars, not labels
Two products can both be called “working capital” while creating very different obligations. Begin by writing down the actual cash that reaches the business and every amount the business may pay to obtain and retire it.
Do not treat APR, interest rate, factor rate, fixed fee, and total cost as synonyms. If the provider does not use APR, ask for a dollar-cost example using the amount and repayment pattern you are considering.
- C-1Cash delivered after deductions
- C-2Upfront and financed fees
- C-3Payment amount and frequency
- C-4Number of scheduled payments
- C-5Total dollars repaid
- C-6Any final payment, balloon, or purchase option
Measure cash-flow pressure
A lower periodic payment may result from a longer term, and a shorter term can create a payment that collides with payroll or supplier dates. Model a normal month and a slow month.
Daily or weekly debits deserve special attention because they can remove cash before the business has time to collect receivables. Ask whether weekends, holidays, or revenue changes alter the debit.
Read the obligation beyond price
Collateral, personal guarantees, UCC filings, financial covenants, default triggers, and restrictions on additional financing change the practical risk of an offer.
Ask how an early payoff is calculated. “No prepayment penalty” does not necessarily mean the payoff equals remaining principal; the agreement controls.
Use a one-page comparison
Put each offer in a column and leave a cell blank until the provider answers it in writing. A blank cell is a question—not a reason to copy language from another offer.
Choose only after the use of funds, repayment source, slow-month pressure, and exit are all visible on the same page.
Plain answers
01What is the most important number?
There is no single number. Cash delivered, total repayment, payment timing, and the consequences of a slow month need to be read together.
02Can I compare a factor rate with an APR?
Not directly. A factor is multiplied by the funded amount; APR incorporates time and payment timing. Ask for total dollar cost and an annualized comparison appropriate to the structure.
03Is the cheapest offer always best?
Not necessarily. Timing, flexibility, collateral, guarantees, and operational restrictions can outweigh a modest difference in price.
Sources and further reading
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