Start with what you receive.
Compare the amount approved with the net amount actually deposited after fees or deductions. The amount available to your business is the starting point for evaluating an offer.
Look at the full repayment obligation.
Review interest, fixed charges, origination fees, draw fees, maintenance fees, and any other required costs. A factor rate and an interest rate are different measures and should not be treated as interchangeable.
Match payments to your cash flow.
A daily or weekly payment affects operations differently from a monthly payment. Consider existing financing obligations and the cash your business needs to operate.
Ask about early repayment.
Do not assume paying early reduces all charges. Review the actual payoff provisions, potential discounts, penalties, and any conditions that apply.
Read the obligations beyond payments.
Look at collateral, guarantees, reporting requirements, default provisions, and any restrictions on additional financing. Ask your advisor and appropriate professional to explain terms you do not understand.
Review each offer alongside your business budget and current debt schedule. A financing decision should reflect both the opportunity and your ability to meet the obligations.
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