The cheapest-looking business loan is not always the cheapest loan. To compare offers, focus on total payback, payment frequency, fees, term length, and cash-flow impact, not just the advertised rate.
The numbers that matter
- Amount funded: how much cash actually lands in your account after fees.
- Total payback: the full dollars repaid over the life of the offer.
- Payment frequency: monthly, weekly, or daily payments change the cash-flow burden.
- Term length: a shorter term can make the APR look higher but may cost fewer total dollars.
- Fees: origination, closing, documentation, or broker fees can change the real cost.
Interest rate vs. factor rate
Traditional business term loans usually quote interest. Some revenue based financing offers quote a factor rate, such as 1.25. A factor rate sets a fixed total payback, so $50,000 at 1.25 means $62,500 total payback before any extra fees.
For a deeper breakdown, read what is a factor rate?
Comparison rule: ask every funder for the same four numbers: amount funded, total payback, payment amount, and payment frequency.
Why faster funding costs more
Speed and flexibility are priced into alternative funding. A same-week offer for a mid-600 credit file will usually cost more than an SBA loan that takes 30-90 days. That does not make it wrong; it means the capital should solve a problem that is worth the cost.
Compare timing with business loan timelines and same-day business funding.
How to avoid overpaying
- Borrow for a specific use, not a vague cushion
- Keep the amount inside what monthly revenue can support
- Compare weekly/daily payments against slow weeks, not best weeks
- Avoid stacking advances without a consolidation plan
Compare real offers, not headline rates
One review can compare MCA, working capital, term loan, and line-of-credit options.
Check My Funding Options