How to compare business financing with weekly payments

Put both offers on the same page

For each offer, request the net proceeds deposited into your business account, the number and amount of payments, the first payment date, fees paid separately, and the total scheduled repayment. Record whether payments are fixed or can change.

Ask the provider to explain any difference between the advertised funding amount and the amount you receive. A fee deducted before disbursement affects the cash available for your business. Keep deducted fees separate from fees paid out of pocket so you do not count either twice.

A simple example

These are fictional offers for arithmetic practice, not available products or recommendations. Assume both deposit $20,000, have fixed weekly payments, and charge no additional fees.

Offer A requires 40 payments of $600: $24,000 in total, or $4,000 more than the amount received. Offer B requires 52 payments of $500: $26,000 in total, or $6,000 more than the amount received. B has the smaller weekly payment but the larger total repayment and longer payment period.

These dollar differences are not APRs. They do not account for the timing of each payment as an annualized rate would. Do not estimate the exact number of payments by multiplying a stated number of months by four; request the dated schedule.

Match the dates to your cash flow

List expected cash receipts and operating payments week by week. Add the proposed financing payment on its actual due date. Include existing debt payments, payroll, rent, inventory and other planned expenses without counting the same expense twice.

Try a second version with slower collections or lower sales. This exercise helps you see which weeks need closer attention; it does not establish eligibility or prove that a financing agreement is affordable. Ask your accountant or adviser to review assumptions that materially affect your decision.

Ask what happens if you repay early

The FTC's February 2020 staff perspective describes inconsistent cost disclosures and notes that some fixed-fee financing does not become cheaper simply because it is repaid sooner. It is background information, not a statement of today's terms for any particular provider.

Request a written explanation of early repayment, any discount or penalty, and how a payoff amount is calculated. Also ask about late payments, payment adjustments, collateral and personal guarantees. Have an appropriate professional review contract terms you do not understand.

Use this comparison checklist

Download the blank comparison worksheet below. Fill it from the written offers rather than sales estimates. If a field is unclear, ask the provider before comparing the offers.

Keep the full agreements with your comparison. A worksheet is a decision aid, not a substitute for the contract, individualized advice or a provider's review.